‘Pharma Bro’ Martin Shkreli will have to forfeit more than $7.3 million in assets – including his one-of-a-kind Wu-Tang Clan album – as part of his punishment in his securities fraud case, a judge ruled Monday.
U.S. District Judge Kiyo Matsumoto issued the order against the jailed Shkreli four days before he is to face sentencing for his conviction last year on charges he cheated wealthy investors in two failed hedge funds he was managing.
Along with the Wu-Tang Clan ‘Once Upon a Time in Shaolin’ album that Shkreli has boasted he bought for $2 million, he would have to give up $5 million in cash in a brokerage account. He also would be forced to forfeit other valuables including a Picasso painting and another unreleased recording that he claims he owns, ‘Tha Carter V’ by Lil Wayne.
A judge today ordered Martin Shkreli (pictured at federal court in New York in August) will have to forfeit more than $7.3 million in assets – including his one-of-a-kind Wu-Tang Clan album
The judge ordered that Shkreli must hand over his two unreleased rap albums – Wu Tang Clan’s Once Upon a Time in Shaolin (left) and Lil Wayne’s Tha Carter V (right)
The judge said the assets won’t be seized until Shkreli has a chance to appeal. His lawyer didn’t immediately respond to a request for comment.
The defense had argued that Shkreli shouldn’t have to forfeit anything because the hedge fund investors actually ended up making a profit from drug company stock he gave them.
After today’s ruling, Shkreli, who made a fortune as a hedge fund manager before opening Turing, must hand over the Wu-Tang Clan album which he bought in 2015.
Only one copy was produced, and sold at auction to Shkreli for $2 million on the auction website Paddle8.
Under the terms of the purchase, it couldn’t be released commercially until 2103, but can be played for free or at parties.
The 34-year-old Shkreli is perhaps best known for jacking up the price of a life-saving drug and for his snarky online antics using the ‘Pharma Bro’ moniker.
In a recent letter to the judge asking for leniency, Shkreli wrote, ‘I was wrong. I was a fool. I should have known better.’
Clanned goods: Only one copy of the album was produced, and came in a metal case with a bound book (being held by, l-r, Wu-Tang members Cilvaringz and RZA; with Alexander Gilkes, founder of Paddle8, which auctioned the album in 2015)
Locked up: Shkreli was not allowed to release the album commercially for 88 years, but could play it for free-
It was an abrupt change in tone for Shkreli from the defiant attitude on display during the trial and even after his conviction when he was still out on bail.
The judge revoked the bail and jailed him in September when he posted he would pay a $5,000 bounty to anyone who could get a lock of Hillary Clinton’s hair while the prominent Democrat was on a book tour.
The defense has asked for leniency in his upcoming sentencing, telling a judge that he ‘learned a very painful lesson’ and used his ‘fame and achievements’ to help others while incarcerated, court documents reveal.
They want a sentence of no more than 18 months behind bars, followed by court-mandated therapy and 2,000 hours of community service. A recommendation from prosecutors is pending.
Shkreli’s lawyers argued that the disgraced pharmaceutical executive is a ‘kind person’ who helped an 11-month-old baby get medicine, comforted a rape victim, and educated fellow inmates in jail, according to a memorandum obtained by DailyMail.com.
The 34-year-old faces up to 20 years in prison on March 9 after being convicted of defrauding investors in two hedge funds he ran – MSMB Capital and MSMB Healthcare – and of securities fraud in connection with his drug company, Retrophin.
Shkreli, 34, faces up to 20 years in prison after being convicted of defrauding investors in two hedge funds he ran – MSMB Capital and MSMB Healthcare – and of securities fraud in connection with a drug company he founded, Retrophin
His family members, colleagues, friends and people he met on the internet all wrote Judge Matsumoto asking for a light prison term.
Friends and relatives describe Shkreli – who was dubbed by many as the ‘Most Hated Man in America before his arrest – as a ‘caring intellectual’ who was a ‘sparkle of a smile’ and an ‘inspiration’ to fellow inmates.
His lawyers argue that Shkreli has ‘worked tirelessly’ to ensure investors received positive returns on investments and that if he’s released, he could continue developing ‘treatments to horrific diseases that have been overlooked by larger companies’.
Attached to the memorandum are more than 50 letters from friends, relatives and colleagues wishing for Shkreli’s release. Also attached is a letter from Shkreli himself, asking the judge for a shortened incarceration at the sentencing.
‘I maintain that I never intended to actually harm anyone,’ he wrote to the judge. ‘I am not trying to be defiant or obstinate. I accept the fact that I made serious mistakes, but I still believe that I am a good person with much potential.’
He said that prison was ‘the most frightening experience’ he had ever faced, but it also gave him the opportunity ‘to see a side of the world seldom seen or discussed’.
Shkreli has been held at the Metropolitan Detention Center in Brooklyn since December after violating bail conditions.
He wrote in his letter: ‘I try my best to set a good example for these individuals too, knowing my fame and achievements were something they might know of, and I try my best to explain that in order to have a chance to succeed, they had to make a serious commitment to lifelong education and move far away from poisonous surroundings and attitudes that lead to a temptation to cut corners and commit crimes.’
Shkreli was out on bail during his trial last year.
In a memorandum filed on Tuesday, Shkreli’s layers asked for a much shorter sentence of 12 to 18 months, followed by court-mandated therapy and 2,000 hours of community service
Shkreli’s lawyers argued that the disgraced pharmaceutical executive was a ‘kind person’ who helped an 11-month-old baby get medicine, comforted a rape victim, according to a memorandum exclusively obtained by DailyMail.com
But he was jailed in December for violating his bail conditions sharing a post on Facebook in which he offered a $5,000 bounty to anyone who could get a lock of Hillary Clinton’s hair while she was on a book tour.
‘The Clinton Foundation is willing to KILL to protect its secrets. So on HRC’s book tour, try to grab a hair from her… Will pay $5,000 per hair obtained,’ the Facebook post said.
Ahead of his bail violation, Shkreli was notorious for his outspoken personality and often clashed with his critics on Twitter.
Prosecutors pointed to several Twitter and Facebook postings by Shkreli that they said were harassing to women.
Twitter banned him from its platform in January 2017 for harassing a female journalist, another incident prosecutors cited in their motion to revoke his bail.
In his letter to the judge ahead of his sentencing, Shkreli said he is an ‘irreverent and free-wheeling individual’ who is willing to speak his mind.
‘I am an individual who prizes equal rights, scholastic achievement and individuality,’ he wrote. ‘Please understand that when I get into a public war of words with someone, my comments do not always reflect my true nature.
‘Sadly, when I get dragged into a mud fight, I often dive in, head first.’
He added that he ‘regrets’ that his temper rises when he gets ‘angry or betrayed’.
Friends described him as a businessman who takes time to care for people facing health crises and an educator who spends hours teaching investment and chemistry courses online and in jail.
‘I can undoubtedly say that Martin has been the most positive and influential part of my experience here thus far,’ inmate Lamark Mulligan said of his time with Shkreli in jail.
People who befriended Shkreli on the internet claim he helped them research medications for rare diseases and gave them ‘a sense of hope’.
In his letter to the judge ahead of his sentencing, Shkreli said he is a ‘good person with much potential’
He says in the letter that he is an ‘irreverent and free-wheeling individual’ who is willing to speak his mind. He also claims, however, that he has been ‘characterized totally incorrectly at trial by some who are biased’
Shkreli said that prison was ‘the most frightening experience’ he had ever faced, but it also gave him the opportunity ‘to see a side of the world seldom seen or discussed’
The court memorandum reads: ‘From helping an 11-month baby getting medicine in a foreign country, to comforting a rape victim, to helping educate prisoners so they have a better life upon release, these letters replete with personal vignettes demonstrating that Martin is comprised of more than his criminal conduct: specifically, he is a kind, caring and generous person who uses his time and effort to help those in need.
‘If not warehoused in a prison, Martin could literally save lives.’
Many of the people Shkreli has helped over the years are people he has met online, his lawyers claim.
One woman – who Shkreli met on a community-based website called ‘Blab’ – said Shkreli was the only person who picked up his phone when she was looking to talk to someone about being raped.
‘We talked for what felt like hours,’ the woman wrote in a letter to the judge. ‘He listened to me, calmed me down, helped me think and see straight, guided me toward what my next steps should be, encouraged me to call the police. An, he let me cry.’
The 11-month baby he saved was in Venezuela waiting on a liver transplant, Shkreli’s lawyers write. Shkreli sent his family one year worth of life-saving medicine for the child.
‘Due to protests in Venezuela, the boy’s father had been unable to secure crucial medicine the boy needed to survive until the transplant,’ Shkreli’s lawyers wrote.
The documents continued: ‘The father was forced to travel through security checkpoints in the mountainous border region dividing Venezuela from the Colombia border town of Cucuta – where he paid five times the price to secure his son’s medicine.
‘Martin heard about this and used his company’s resources to provide aid.’
Shkreli, pictured in a court sketch with his lawyer, Ben Brafman, was jailed in December for violating his bail conditions sharing a post on Facebook in which he offered a $5,000 bounty to anyone who could get a lock of Hillary Clinton’s hair while she was on a book tour
In the post, he said that the Clinton Foundation was ‘willing to KILL to protect its secrets’ and that he wanted strands of Hillary Clinton’s hair
On other occasions, he gave a homeless man – nicknamed JP Morgan – a job interview after he beat the pharmaceutical executive at chess, donated $1million to his New York high school, and supported LGBT charitable missions, Shkreli’s lawyers said.
Shkreli’s younger brother, Mark, writes that he has always dreamed of being just like Shkreli, calling him an ‘aspiration’ who is ‘very giving and kind’.
In a letter to the sentencing judge, Mark fondly remembered a trip he made to Miami with Shkreli, where they attended Wrestlemania.
‘Martin is misunderstood because I almost feel like Martin is sometimes playing a character as wrestlers do, but at the same time Martin is an immensely gifted, intense individual, who is very dedicated to discovering new drugs and treatments for rare diseases,’ Mark Shkreli writes.
He also argues that Shkreli ‘made mistakes’ when he was arrested after he entering the spotlight for raising the price of he life-saving AIDs medication Daraprim.
‘Who wouldn’t make mistakes if they were young, wealthy, and successful, and suddenly had their life put under a microscope?’ he writes.
A doctor who worked with Shkreli before his arrest argued that the 34-year-old ‘has a lot to give to our society, and in particular patients suffering with rare diseases’.
Another friend recalled a time when Shkreli defended a teen with autism after 50 Cent made comments about him on social media.
‘Martin started a crowdfunding campaign, donating thousands of dollars of his own money and inspiring others to do the same,’ the friend wrote.
Another pal commented on Shkreli’s ‘complex’ personality.
Shkreli is best known for jacking up the price of the life-saving medication Daraprim – used by AIDS patients, pregnant women and others with compromised immune systems – from $13.50 a tablet to $750
Longtime friend Gary Mohamed, who has known Shkreli for more than 15 years, wrote: ‘Equal parts brilliant and impossible, and always struggling with personal demons hell bent on self-destruction.
‘In fact, Martin’s lifelong dream of running a publicly traded pharmaceutical company was derailed pre-maturely by this compulsion for self destruction.’
Shkreli – also known as the ‘Pharma Bro’ – is best known for jacking up the price of the life-saving medication Daraprim – used by AIDS patients, pregnant women and others with compromised immune systems – from $13.50 a tablet to $750.
The former pharmaceutical CEO argued that he rose the price of the drug to provide funding for research toward a better form of Daraprim that would eventually be more accessible to all.
A judge ruled on February 26 that Shkreli was responsible for nearly $10.5million in losses in his securities fraud case.
The amount set by Judge Kiyo Matsumoto could result in a harsher punishment for Shkreli, 34, at his March 9 sentencing.
The judge rejected arguments by lawyers for the former pharmaceutical CEO that investors in his failed hedge funds didn’t suffer actual losses because he paid them back with drug company stock.
She found Shkreli should be penalized for the losses because he made risky transactions with investors’ millions without their permission.