Days before his sentencing for a criminal fraud conviction disgraced pharma entrepreneur Martin Shkreli has been ordered to forfeit $7.36 million.
Days before his sentencing for a criminal fraud conviction disgraced pharma entrepreneur Martin Shkreli has been ordered to forfeit $7.36 million.
On Monday Judge Kiyo Matsumoto ordered the asset forfeiture despite the insistence of Shkreli’s attorneys that he is “completely cash-broke.” In order to satisfy the order, Matsumoto said that Shkreli must forfeit his interests in “substitute assets,” which will include the Wu Tang album “Once Upon a Time in Shaolin” for which he paid about $2 million. CNBC noted that the assets Shkreli will be forced to hand over include $5 million in cash in an E-Trade account he used to secure his bond, some of his stake in Vyera Pharmaceuticals (formerly known as Turing Pharmaceuticals) and a painting by Pablo Picasso.
Shkreli’s stake in Turing, which he founded in 2015 and immediately took it to heights of infamy, is worth between $30 million and $50 million, CNBC reported. Shkreli rose to infamy after he guided Turing through the acquisition of Daraprim, a toxoplasmosis treatment, and immediately increased the price about 5,000 percent, from $13.50 per pill to $750 per pill. After becoming the poster boy for pharma greed and earning the title of “most hated man in America,” Shkreli lamented the fact that he didn’t raise the price of Daraprim even higher in order to increase profit.
In December 2015 the federal government charged him with eight counts of securities fraud, securities fraud conspiracy and wire fraud conspiracy. In February Matsumoto ruled that Shkreli will be responsible for $10.4 million in financial losses for defrauding hedge fund investors. In August 2017 Shkreli, infamously known as “Pharma Bro,” was found guilty on two charges of securities fraud and one charge of conspiracy to commit conspiracy fraud. Matsumoto ruled that Shkreli was ultimately responsible for the losses his investors faced.
During his trial, the prosecution argued that Shkreli lied to the investors of the two hedge funds he ran, MSMB Capital and MSMB Healthcare. He ran the funds into the ground but was able to pay them back with stock from Retrophin, a pharma company he founded, which ultimately became more valuable than the initial investments from the investors.
With the $10.4 million amount stated by the judge, that means Shkreli could face up to 20 years in prison for his crimes. Typically the higher the financial loss amount in a crime affects federal sentencing guidelines. Shkreli’s sentence is expected to be handed down on Friday.
The value of the $7.36 million in assets that Shkreli has been ordered to turn over will be applied to satisfying the amount of money Shkreli will pay the government following “the resolution of any third-party claims” to the assets, Matsumoto said in her ruling, according to CNBC.
