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March 9, 2018

Federal judges fives "Pharma Bro" Martin Shkreli (waaaaaay-below-guideline) sentence of 7 years

As reported in this AP piece, "Martin Shrkeli, the smirking “Pharma Bro” vilified for jacking up the price of a lifesaving drug, was sentenced Friday to seven years in prison for defrauding investors in two failed hedge funds."  Here is more on what seems like a pretty interesting sentencing hearing:

The self-promoting pharmaceutical executive notorious for trolling critics online was convicted in a securities fraud case last year unconnected to the price increase dispute.

Shkreli, his cocky persona nowhere to be found, cried as he told U.S. District Judge Kiyo Matsumoto he made many mistakes and apologized to investors. “I want the people who came her today to support me to understand one thing, the only person to blame for me being here today is me,” he said. “I took down Martin Shkreli.” He said that he hopes to make amends and learn from his mistakes and apologized to his investors. “I am terribly sorry I lost your trust,” he said. “You deserve far better.”

The judge insisted that the punishment was not about Shkreli’s online antics or raising the cost of the drug. “This case is not about Mr. Shkreli’s self-cultivated public persona ... nor his controversial statements about politics or culture,” the judge said, calling his crimes serious.  He was also fined $75,000 and received credit for the roughly six months he has been in prison.  The judge ruled earlier this week that Shkreli would have to forfeit more than $7.3 million in a brokerage account and personal assets including his one-of-a-kind Wu-Tang Clan album that he boasted he bought for $2 million.  The judge said the property would not be seized until Shkreli had a chance to appeal.

Prosecutors argued that the 34-year-old was a master manipulator who conned wealthy investors and deserved 15 years in prison.  His lawyers said he was a misunderstood eccentric who used unconventional means to make those same investors even wealthier.  Attorney Benjamin Brafman told Matsumoto Friday that he sometimes wants to hug Shkreli and sometimes wants to punch him in the face , but he said his outspokenness shouldn’t be held against him.  He said he deserved a sentence of 18 months or less because the investors got their money back and more from stock he gave them in a successful drug company.”...

Before sentencing him, the judge said that it was up to Congress to fix the issue of the HIV price-hike.  And she spoke about how his family and friends “state, almost universally, that he is kind and misunderstood” and willing to help others in need. S he said it was clear he is a “tremendously gifted individual who has the capacity for kindness.”

She quoted from letters talking about generous acts like counseling a rape victim, teaching inmates math and chess, and funding family members.  The defense had asked the judge to consider the letters in its case for leniency, including professionals he worked with who vouched for his credentials as a self-made contributor to pharmaceutical advances.

Other testimonials were as quirky as the defendant himself.  One woman described how she became an avid follower of Shkreli’s social media commentary about science, the pharmaceutical industry, but mostly, about himself.  She suggested that those who were annoyed by it were missing the point.  “I really appreciate the social media output, which I see on par with some form of performance art,” she wrote.

Another supporter said Shkreli’s soft side was demonstrated when he adopted a cat from a shelter — named Trashy — that became a fixture on his livestreams.  Another letter was from a man who said he met Shkreli while driving a cab and expressed his appreciation at how he ended up giving him an internship at one of his drug companies.

In court filings, prosecutors argued that Shkreli’s remorse about misleading his investors was not to be believed. “At its core, this case is about Shkreli’s deception of people who trusted him,” they wrote.

Prior related posts:

March 9, 2018 at 02:06 PM | Permalink


How much time will he actually serve?

Posted by: Chris Redburn | Mar 9, 2018 3:45:30 PM

What a great result for him. He would've got 30 here.

Posted by: whatever | Mar 9, 2018 3:52:56 PM

"Attorney Benjamin Brafman told Matsumoto Friday that he sometimes wants to hug Shkreli and sometimes wants to punch him in the face , but he said his outspokenness shouldn't be held against him."

Conceptually, I agree with this but I can't ignore the pragmatic truth that I live in a society and a legal system that holds an individual's silence against them. So you play with fire you get your fingers burned.

Posted by: Selfie Man | Mar 9, 2018 4:43:53 PM

What do you mean how much will he serve? This is the federal system. There is no parole and he must serve statutorily 85 percent of his sentence. This isn't California, let everyone free stuff.

Posted by: The Prince | Mar 9, 2018 4:50:07 PM

As The Prince notes, Shkreli has been sentenced in a system that abolished parole 30+ years ago, so he will in some sense serve all of his sentence. BUT, he gets credit for six months already served AND could get up to 12 more months off (15% of sentence) for good behavior in prison AND maybe can get into a halfway house or home confinement for final months of his term. So he might be out of the federal prison system as early as 2023.

Posted by: Doug B. | Mar 9, 2018 5:34:41 PM

Mr. B.'s comment shows the first question is fairly sensible.

Posted by: Joe | Mar 9, 2018 5:39:16 PM

While I understand that parole in the sense of a discretionary parole body was abolished, isn't Shkreli on parole from the time he leaves prison to the end date of his sentence? By that I mean he is no longer in prison, but he is still subject to conditions mandated by the state and failure to comply can result in being resentenced for a violation.

I could certainly be wrong and I welcome any correction. Perhaps we need a new word to distinguish between the differences in "parole."

Posted by: Anonuser879 | Mar 9, 2018 7:00:44 PM

That depends on whether his sentence included "supervised release," which has terms similar to parole, but is really more akin to what is commonly known as probation.

Posted by: Fat Bastard | Mar 9, 2018 9:47:00 PM

How goodtime days are calculated arent as straight forward as one thinks.
Requirement us to serve at least 85% of the sentence as Doug indicated. So one would think 365 X .85% = 310.25 or 54 days of a yrs sentence has to be served. But you are granted your good time days after each year is served, so after 1 year you are granted 54 days, actually making one serve 87.2% out of each yr sentenced.

There was a case a few yrs back, 2 guys appealed how good time days were calced, as they had like approx 25 yrs to serve and dudnt want to do the extra 7 days every yr.
They lost the appeal. How they calc it is a scream, its a good read to see how the attys, explained how you would have to go backwArds to calc the days, not like expected.

Here is a brief view: On June 7, my federal public defender office had the disturbing experience of losing Barber v. Thomasin the U.S. Supreme Court, a case that — if the outcome had been different — would have prevented up to 36,000 years of federal overincarceration, saving taxpayers up to $951 million. The issue was whether the federal statute that allowed federal prisoners to earn up to 54 days of good-time credits for each year of their sentences meant that a prisoner could reduce the sentence imposed by up to 15%. This sounds like an easy figure to calculate (54/365), but the federal Bureau of Prisons (BOP), based on time served, came up with a complex formula that works out to 12.8% of the prisoner's sentence, or only 47 days per year of the sentence imposed. In light of the Court's majority ruling approving the BOP's interpretation of 12.8%, Congress should now amend the good-time credit statute to require the 15% rate against the sentence imposed that has received bipartisan support in previous legislation and that provides the basis for the federal guidelines' sentencing ranges....

Posted by: MidWestGuy | Mar 10, 2018 4:04:33 AM


Good for Trump.

Posted by: federalist | Mar 10, 2018 9:35:54 AM

Anonuser879: In the federal system, what you are describing is what is called "supervised release" and it kicks in only after an offender is released from their formal prison term. In Shkreli's case, he got three years' supervised release to be served AFTER he finishes his 7 year prison term.

And MidWestGuy highlights that there has been litigation over whether the good time credit rules should add up to roughly 6.5 or 7.5 weeks credit per year of good prison behavior. Since Shkreli has a 7-year sentence, the lower rate that BOP uses means roughly an extra 1.5 months. For prisoners with 30+ years, this technical difference can add up to a serious chuck of time.

Posted by: Doug B | Mar 10, 2018 10:22:35 AM

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