Martin Shkreli, the disgraced biotech entrepreneur, was sentenced on Friday to seven years in jail for fraud, concluding a saga that began when he became infamous for hiking the price of a life-saving medicine.
Shkreli was convicted in August for crimes committed between 2009 and 2011, when he covered up heavy losses at his two hedge funds and then plundered cash from a biotech group to mask the problems.
Before passing sentence in Brooklyn federal court, Judge Kiyo Matsumoto said: "This case is not about pharmaceutical pricing or Mr Shkreli's controversial statements or actions, nor his scientific aptitude." Its essence is instead about "repeated breaches of trust" and "repeated lies to his investors".
Earlier, choking back tears, Shkreli read a prepared statement that was at times deeply remorseful and at times defiant at how the government portrayed his actions. “I don’t think the real me is a collage of voyeuristic and Orwellian snippets collected over the years,” he said.
“I wanted to be a success in the business world, while being young and immature...I will do it [one day], the right way.”
Shkreli’s fraud predated the price-gouging controversy and this trial would have gone largely unnoticed but for his status as an international pariah. He garnered widespread condemnation in 2015 after raising the price of an Aids and cancer drug from $13.50 to $750 per pill.
Clinton rebuke
His actions prompted a rebuke from Hillary Clinton, then running for US president, who said she would crack down on drug pricing if elected - a pledge that wiped tens of billions of dollars from the value of biotech stocks.
Mrs Clinton made her pricing threat on Twitter, a medium that would end up at the heart of the Shkreli story. The “pharma bro” became one of the world’s best-known internet trolls for harassing his many critics on social media, resulting in his being repeatedly banned from Twitter.
Shkreli was initially freed on bail following his conviction on two counts of securities fraud and one count of conspiracy to commit securities fraud, having been acquitted of five other counts. But he was sent to prison weeks later after he offered a $5,000 bounty in a Facebook post to anyone who could "grab a hair" from Mrs Clinton's head during her recent book tour.
Iconoclast
The self-styled iconoclast was never far from controversy: he bought the sole copy of an album by Wu-Tang Clan, the rap group, for $2 million; live-streamed his life over a YouTube feed; and aligned himself with the "alt-right", a loose political collective that espouses white nationalism.
Earlier this month, the court ordered the Wu-Tang album be seized along with other assets worth a total of $7.36 million, including a Picasso painting and another one-of-its-kind rap record.
Although jurors at his trial were told to disregard his price gouging history, the episode was cited by government prosecutors in their push for a tough sentence. Shkreli was “motivated by the potential to make tremendous profits”, they said in a memo asking for a 15-year jail term.
Shkreli’s lawyers had argued for a far more lenient sentence of 12 to 18 months.
During Shkreli’s trial, the defence had argued that his crimes were effectively victimless, given that none of the investors in his hedge fund lost money and some in fact made significant gains.
Lighter sentence
Ben Brafman, Shkreli's lawyer, pleaded with the judge for a lighter sentence than the government had recommended. "He should not be sentenced solely for being Martin Shkreli, with all the baggage he brings to the table." Outside the court after the sentence, he added: "Could it have been worse? Absolutely."
A US prosecutor, Jacquelyn Kasulis, said that the image of a troubled young man belied Shkreli's arrogance and contempt for the legal process, along with sometimes vicious comments before, during and after the trial.
“He victimises people without thinking about it. He believes that the end truly does justify the means,” she said. “He needs to be stopped. Society needs to be protected.”
Shkreli never seemed prepared for his fate, at first predicting he would be acquitted and then insisting that his punishment would be “close to nil”. But the spectre of prison was never far from his mind.
‘Miss my computer’
"Oh, I've certainly thought about [prison], anyone in my position would," he told the Financial Times in an interview in 2016, predicting that his fellow inmates "at the white-collar prison [would be] gigantic, huge Shkreli supporters".
Given that he spent most of his time before being jailed co-oped up in his Manhattan apartment, he said he thought prison would be bearable. "If you look at my life on a daily basis, it's not very different from a prison-like condition, although I'm going to miss my computer."
At Friday’s sentencing hearing, he said: “Prison has been a heartbreaking experience. The hardest part is seeing the sad world around you.”
- Copyright The Financial Times Limited 2018
