February 28, 2018 / 2:32 PM / 4 months ago

'Pharma bro' Shkreli seeks 12 to 18 month sentence, below guidelines

NEW YORK (Reuters) - Martin Shkreli, the former drug company executive convicted of defrauding investors in two hedge funds he ran, has asked a federal judge to sentence him to 12 months to 18 months in prison, much less than suggested federal guidelines.

FILE PHOTO: Martin Shkreli, former chief executive officer of Turing Pharmaceuticals and KaloBios Pharmaceuticals Inc, departs after a hearing at U.S. Federal Court in Brooklyn, NY, U.S., June 26, 2017. REUTERS/Lucas Jackson/File Photo

Shkreli, 34, has been in jail since September, when U.S. District Judge Kiyo Matsumoto revoked his bail after he offered a $5,000 bounty for a strand of Hillary Clinton’s hair in a Facebook post. Matsumoto is scheduled to sentence him on March 9.

Shkreli’s lawyers said in a court filing on Tuesday that a sentence of 27 years or more calculated using federal guidelines would be “draconian and offensive.”

The filing included a letter from Shkreli, asking the judge for leniency. “I accept the fact that I made serious mistakes, but I still believe that I am a good person with much potential,” he said.

In addition to the prison sentence, they proposed Shkreli complete 2,000 hours of community service and undergo court-mandated therapy.

Prosecutors are expected to submit their own proposed sentence next week.

Shkreli, nicknamed “Pharma Bro,” raised the price of anti-infection drug Daraprim by over 5,000 percent in 2015 while he was chief executive officer of Turing Pharmaceuticals.

A jury found him guilty last August of unrelated securities fraud charges. They determined that he lied to investors about the performance of his hedge funds, MSMB Capital and MSMB Healthcare. He also was found guilty of conspiring to manipulate the stock price of a drug company he founded, Retrophin Inc.

Shkreli’s investors eventually came out ahead after he paid them in shares of Retrophin, and in some cases through settlement agreements and consulting contracts with the company, according to testimony at trial.

However, Matsumoto ruled Monday that he would still be held responsible for defrauding investors out of millions of dollars, because he secured their investments through fraud.

Shkreli’s lawyers said in the filing that he made mistakes when communicating with his investors not because he wanted to steal from them, but because he “could not bring himself to admit failure.”

They also tried to counter the view that Shkreli was the “greedy Pharma Bro.” They pointed to his work at Retrophin to develop a drug for a rare childhood degenerative disease called PKAN that was used to treat some patients in Cyprus, as well as online relationships he has maintained with patients.

Even the controversial Daraprim price hike was meant to fund research into rare diseases, they said.

The filing included dozens of letters supporting Shkreli, including from family members and a former Turing employee who praised his “altruistic passion.”

Reporting by Brendan Pierson in New York; Editing by Jeffrey Benkoe

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