'Pharma Bro' Shkreli gets 7 years for defrauding investors

NEW YORK, March 9 (Reuters) - Martin Shkreli, the former drug company executive who made headlines by jacking up the price of a lifesaving drug before he was found guilty of defrauding investors, was sentenced to 7 years and a $75,000 fine on Friday.

The sentence from U.S. District Judge Kiyo Matsumoto in federal court in Brooklyn, New York, was shorter than the 15 years asked for by prosecutors but much longer than the 12 to 18 months Shkreli's lawyers had sought.

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Martin Shkreli throughout trial
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Martin Shkreli throughout trial
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, right, exits federal court with his attorney Benjamin Brafman, left, in the Brooklyn borough of New York, U.S., on Friday, Aug. 4, 2017. Shkreli, notorious for raising the price of a potentially life-saving drug by 5,000 percent, was found guilty Friday of defrauding investors in two hedge funds and in�Retrophin Inc., a pharmaceutical company he co-founded. Shkreli was convicted of three of eight charges, including securities fraud. Photographer: Peter Foley/Bloomberg via Getty Images
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, right, exits federal court with his attorney Benjamin Brafman, left, in the Brooklyn borough of New York, U.S., on Friday, Aug. 4, 2017. Shkreli, notorious for raising the price of a potentially life-saving drug by 5,000 percent, was found guilty Friday of defrauding investors in two hedge funds and in�Retrophin Inc., a pharmaceutical company he co-founded. Shkreli was convicted of three of eight charges, including securities fraud. Photographer: Peter Foley/Bloomberg via Getty Images
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, left, speaks to members of the media with his attorney Benjamin Brafman outside federal court in the Brooklyn borough of New York, U.S., on Friday, Aug. 4, 2017. Shkreli, notorious for raising the price of a potentially life-saving drug by 5,000 percent, was found guilty Friday of defrauding investors in two hedge funds and in�Retrophin Inc., a pharmaceutical company he co-founded. Shkreli was convicted of three of eight charges, including securities fraud. Photographer: Peter Foley/Bloomberg via Getty Images
NEW YORK, NY - AUGUST 04: Former pharmaceutical executive Martin Shkreli pauses while speaking to the media in front of U.S. District Court for the Eastern District of New York with members of his legal team after the jury issued a verdict, August 4, 2017 in the Brooklyn borough of New York City. Shkreli was found guilty on three of the eight counts involving securities fraud and conspiracy to commit securities and wire fraud. (Photo by Spencer Platt/Getty Images)
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, exits federal court in the Brooklyn borough of New York, U.S., on Friday, Aug. 4, 2017. Shkreli, notorious for raising the price of a potentially life-saving drug by 5,000 percent, was found guilty Friday of defrauding investors in two hedge funds and in�Retrophin Inc., a pharmaceutical company he co-founded. Shkreli was convicted of three of eight charges, including securities fraud. Photographer: Peter Foley/Bloomberg via Getty Images
NEW YORK, NY - AUGUST 4: (L to R) Lead defense attorney Benjamin Brafman walks with former pharmaceutical executive Martin Shkreli after the jury issued a verdict at the U.S. District Court for the Eastern District of New York, August 4, 2017 in the Brooklyn borough of New York City. Shkreli was found guilty on three of the eight counts involving securities fraud and conspiracy to commit securities and wire fraud. (Photo by Drew Angerer/Getty Images)
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, right, arrives at federal court in the Brooklyn borough of New York, U.S., on Friday, Aug. 4, 2017. The 34-year-old Shkreli, known as 'Pharma Bro,' is accused of taking money from investors in his previous hedge funds and using it to start Retrophin, then using the drug-development company's cash to pay them back. Photographer: Peter Foley/Bloomberg via Getty Images
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, center, while his attorney Benjamin Brafman, right, speaks to members of the media outside federal court in the Brooklyn borough of New York, U.S., on Friday, Aug. 4, 2017. Shkreli, notorious for raising the price of a potentially life-saving drug by 5,000 percent, was found guilty Friday of defrauding investors in two hedge funds and in�Retrophin Inc., a pharmaceutical company he co-founded. Shkreli was convicted of three of eight charges, including securities fraud. Photographer: Peter Foley/Bloomberg via Getty Images
NEW YORK, NY - AUGUST 04: Former pharmaceutical executive Martin Shkreli speaks to the media in front of U.S. District Court for the Eastern District of New York with members of his legal team after the jury issued a verdict, August 4, 2017 in the Brooklyn borough of New York City. Shkreli was found guilty on three of the eight counts involving securities fraud and conspiracy to commit securities and wire fraud. (Photo by Spencer Platt/Getty Images)
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, right, arrives at federal court in the Brooklyn borough of New York, U.S., on Friday, Aug. 4, 2017. The 34-year-old Shkreli, known as 'Pharma Bro,' is accused of taking money from investors in his previous hedge funds and using it to start Retrophin, then using the drug-development company's cash to pay them back. Photographer: Peter Foley/Bloomberg via Getty Images
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, left, exits federal court with his attorney Benjamin Brafman in the Brooklyn borough of New York, U.S., on Thursday, Aug. 3, 2017. The 34-year-old Shkreli, known as 'Pharma Bro,' is accused of taking money from investors in his previous hedge funds and using it to start Retrophin, then using the drug-development company's cash to pay them back. Photographer: Peter Foley/Bloomberg via Getty Images
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, arrives at federal court in the Brooklyn borough of New York, U.S., on Thursday, Aug. 3, 2017. The 34-year-old Shkreli, known as 'Pharma Bro,' is accused of taking money from investors in his previous hedge funds and using it to start Retrophin, then using the drug-development company's cash to pay them back. Photographer: Peter Foley/Bloomberg via Getty Images
NEW YORK, NY - AUGUST 3: (L to R) Former pharmaceutical executive Martin Shkreli and attorney Benjamin Brafman depart the U.S. District Court for the Eastern District of New York, August 3, 2017 in the Brooklyn borough of New York City. Jurors finished their fourth day of deliberations and have not reached a verdict. Shkreli faces eight counts of securities fraud and conspiracy to commit securities and wire fraud. (Photo by Drew Angerer/Getty Images)
NEW YORK, NY - AUGUST 3: Former pharmaceutical executive Martin Shkreli departs the U.S. District Court for the Eastern District of New York, August 3, 2017 in the Brooklyn borough of New York City. Jurors finished their fourth day of deliberations and have not reached a verdict. Shkreli faces eight counts of securities fraud and conspiracy to commit securities and wire fraud. (Photo by Drew Angerer/Getty Images)
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, center, exits federal court with his attorney Benjamin Brafman, right, in the Brooklyn borough of New York, U.S., on Thursday, Aug. 3, 2017. The 34-year-old Shkreli, known as 'Pharma Bro,' is accused of taking money from investors in his previous hedge funds and using it to start Retrophin, then using the drug-development company's cash to pay them back. Photographer: Peter Foley/Bloomberg via Getty Images
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, center, leaves federal court with his attorney Benjamin Brafman, left, in the Brooklyn borough of New York, U.S., on Wednesday, Aug. 2, 2017. The jury mulling the fate of Shkreli ended a third day of deliberations without a verdict. Photographer: Peter Foley/Bloomberg via Getty Images
NEW YORK, NY - AUGUST 2: Former pharmaceutical executive Martin Shkreli (c) and attorney Benjamin Brafman (l) depart the U.S. District Court for the Eastern District of New York, August 2, 2017 in the Brooklyn borough of New York City. After hearing closing arguments on Friday, jurors are set to begin deliberations on Monday morning. (Photo by Joe Penney/Getty Images)
NEW YORK, NY - AUGUST 2: Former pharmaceutical executive Martin Shkreli departs the U.S. District Court for the Eastern District of New York, August 2, 2017 in the Brooklyn borough of New York City. After hearing closing arguments on Friday, jurors are set to begin deliberations on Monday morning. (Photo by Joe Penney/Getty Images)
NEW YORK, NY - AUGUST 03: (L-R) Former pharmaceutical executive Martin Shkreli walks with attorney Benjamin Brafman as they arrive at the U.S. District Court for the Eastern District of New York, August 3, 2017 in the Brooklyn borough of New York City. Jurors are continuing deliberations on Thursday. Shkreli faces eight counts of securities fraud and conspiracy to commit securities and wire fraud. (Photo by Spencer Platt/Getty Images)
NEW YORK, NY - AUGUST 2: (L-R) Former pharmaceutical executive Martin Shkreli and attorney Benjamin Brafman arrive at the U.S. District Court for the Eastern District of New York, August 2, 2017 in the Brooklyn borough of New York City. Jurors are continuing deliberations on Wednesday. Shkreli faces eight counts of securities fraud and conspiracy to commit securities and wire fraud. (Photo by Drew Angerer/Getty Images)
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, center, leaves federal court with his attorney Benjamin Brafman, left, in the Brooklyn borough of New York, U.S., on Wednesday, Aug. 2, 2017. The jury mulling the fate of Shkreli ended a third day of deliberations without a verdict. Photographer: Peter Foley/Bloomberg via Getty Images
Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, leaves federal court in the Brooklyn borough of New York, U.S., on Wednesday, Aug. 2, 2017. The jury mulling the fate of Shkreli ended a third day of deliberations without a verdict. Photographer: Peter Foley/Bloomberg via Getty Images
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Shkreli's lawyer Benjamin Brafman told the judge before the sentencing that Shkreli, 34, suffered from depression and an anxiety disorder and was a “somewhat broken” person, whom the government wanted to “throw away.”

Assistant U.S. Attorney Jacquelyn Kasulis had said a 15 year sentence was justified in part because Shkreli’s crimes were not an “isolated lapse in judgment,” but a pattern of conduct including separate frauds for his two hedge funds and for his drug company Retrophin Inc.

The Brooklyn-born entrepreneur became known as the "Pharma Bro" in September 2015 after founding Turing Pharmaceuticals, buying the anti-parasitic drug Daraprim and raising its price by 5,000 percent to $750 per pill. Shkreli was indicted for the unrelated securities fraud charges in December 2015.

At the hearing, Shkreli had choked up as he said he had learned from his mistakes.

“There is no conspiracy to take down Martin Shkreli. I took down Martin Shkreli with my disgraceful and shameful actions,” he said.

A jury in August found Shkreli guilty of defrauding investors in two hedge funds he ran, MSMB Capital and MSMB Healthcare, by sending them fake account statements and concealing huge losses. He was also convicted of scheming to prop up the stock price of Retrophin, the drug company he founded in 2011.

The $75,000 fine comes on top of $7.36 million in forfeiture Shkreli had already been ordered to pay following his conviction.

Brafman, noting that he was old enough to be Shkreli’s father, said his client had not always been easy to work with.

“There are times when I want to hug him and hold him and comfort him and there are times when I want to punch him in the face,” Brafman said.

Kasulis said Brafman was trying to portray Shkreli as “a child.”

“Mr. Shkreli is about to turn 35 years old,” she said “ He is a man who needs to take responsibility for his actions."

Shkreli has been in jail since September, when Matsumoto revoked his bail after he offered his social media followers $5,000 if they could bring him a hair from former U.S. presidential candidate Hillary Clinton.

(Reporting By Brendan Pierson in New York; Editing by Meredith Mazzilli and Chizu Nomiyama)

 

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