The day of judgment is near for Martin Shkreli, whose lawyer admits became “the most hated man in America.” Shkreli has told a court he is misunderstood and deserves leniency—no more than 18 months in jail. However, a ruling this week by the judge who will decide the fate of the former hedge fund manager and drug company founder makes that unlikely and sets the stage for him to serve much more time in federal prison.
By finding that the “intended” losses of Shkreli’s scheme to defraud drug company and hedge fund investors would have run to more than $10 million, Judge Kiyo Matsumoto set the stage for the 34-year-old former drug company founder to spend more than a decade in jail. Shkreli is slated to be sentenced March 9.
A New York jury convicted Shkreli in August on three of eight charges, including securities fraud. At trial, former Retrophin Chairman Steven Richardson testified Shkreli was running what could be described as a hedge fund within the drug company, permitting employees to use investors’ money to trade stocks. Evidence showed he used some of that money to pay back losses to investors in his hedge fund.
He was initially released on a $5 million bond, but the judge revoked that and sent him to jail weeks later when Shkreli, who was notorious for his outrageous behavior and claims, posted on Facebook he would pay a $5,000 bounty to whoever could get him a lock of Hillary Clinton’s hair.
Still, his lawyers argue those antics mask a person of deep compassion for others. In a 93-page filing, Shkreli’s attorneys argued that once the judge understood his “true nature” she would find that 12 to 18 months in jail, followed by court-mandated therapy and 2,000 hours of community service, is a “sufficient” penalty.
The highly redacted document then goes through Shkreli’s entire life, lauding the boy who had a “sparkle of smile” to please his father, to the 6-year-old intellectual reciting square roots, to his work life in which he gave a job to a homeless man and dedicated himself to finding cures for terrible diseases.
“This case is a study of almost unimaginable contradictions,” the document says. “How is it, for example, that Martin Shkreli would help create medicines to treat otherwise untreatable diseases that kill children ... that he would read patent applications and scientific literature day and night (even while incarcerated) ... in order to understand and treat fatal diseases that the rest of the world ignored ... that he would use his time incarcerated in the Metropolitan Detention Center teaching and inspiring fellow inmates; and that despite all of this, would nevertheless end up being the most hated man in America?”
Later in the filing, he answers that question. It was his decision after founding Turing Pharmaceutical and acquiring the drug Daraprim, to jack up its price to $750 a tablet from $13.50 a tablet, a 5,000% price hike. This is a drug that his lawyers acknowledged is used to treat a parasite infection that causes serious problems for "young children, pregnant women, and ... AIDS patients."
Overnight, this business decision made Martin “the most hated man in America,” his lawyer admitted. But that price hike, the document claims, was made not out of greed but so Turing would have the money to develop new drugs to cure disease.
The federal case against Shkreli had nothing to do with that decision and the judge, in her finding, doesn’t mention Daraprim. Instead, she focuses on evidence that showed Shkreli used misrepresentations to raise money from investors and then gave them performance reports "that materially misstated the value of their investments and the fund’s performance.”
Shkreli, in a letter to the court, said "I understand it, I am very far from blameless. I caused this entire mess to happen. I lost the trust of my investors who now have questioned my motives and integrity. This is a painful realization that I will never forget."
But if the judge would show "mercy" at sentencing, Shkreli promised to build his life on "honesty, integrity and achievement that advances humanity" and would strive "to make Your Honor proud of me in the years ahead."