Martin Shkreli sentenced to 7 years in prison for fraud

PHOTOGRAPHER: The New York Times

Martin Shkreli exits federal court in New York during his fraud trial on July 31, 2017.

NEW YORK — Martin Shkreli, a former pharmaceutical executive notorious for sharply increasing drug prices, mounting sneering defenses of his actions and even issuing a bounty for one of Hillary Clinton’s hairs, was sentenced Friday to 7 years in prison after being convicted of fraud last year.

Prosecutors had sought a sentence of at least 15 years; the defense had pushed for 12 to 18 months.

Shkreli, 34, is best known for raising the price of a drug, Daraprim, by 5,000 percent in a move that was widely condemned by the public and politicians. His fraud convictions were unrelated to that episode, stemming instead from his involvement with Retrophin, a pharmaceutical company he founded in 2011, and two hedge funds he ran.

In August, a jury convicted Shkreli, nicknamed Pharma Bro, on 3 of 8 counts, concluding that he had lied to investors about, among other things, how the hedge funds were managed, what they invested in and how much money they had. The jury found that he had also secretly controlled a huge number of Retrophin shares.

As she imposed the sentence, U.S. District Court Judge Kiyo A. Matsumoto cited Shkreli’s “egregious multitude of lies.” She said he seemed “genuinely remorseful,” but he “repeatedly minimized” his conduct, including in statements and emails after his conviction.

“I was never motivated by money,” said Shkreli, sitting at the defense table as he read from notes before the sentence was handed down. He cried as he gave his statement.

Shortly after Shkreli’s conviction, his lawyers suggested that he would not be sentenced to prison. They noted that he had ultimately paid back his investors, meaning there was no financial loss.

Matsumoto rejected that argument, citing legal precedents establishing that fraud losses cover property whether or not it is returned. She had ruled Monday that Shkreli would also have to forfeit $7.36 million to the government to cover his fraud.

Matsumoto also authorized the government to seize Shkreli’s assets, including a one-of-a-kind Wu-Tang Clan album and a Picasso, if he was otherwise unable to come up with the required restitution.