Sen­tenc­ing date loom­ing, a fed­er­al judge's rul­ing could leave Mar­tin Shkre­li in prison for years to come

When the no­to­ri­ous biotech ex­ec Mar­tin Shkre­li was con­vict­ed on three counts of felony fraud last fall, he im­me­di­ate­ly boast­ed that he had skat­ed clear of the worst charges, lim­it­ing him to no more than a light prison sen­tence at Club Fed that he would soon com­plete.

But with his sen­tenc­ing loom­ing on March 9, the judge in the case may be think­ing some­thing en­tire­ly dif­fer­ent.

Judge Kiyo Mat­sumo­to

In a new rul­ing is­sued at the be­gin­ning of the week, Judge Kiyo Mat­sumo­to de­cid­ed that Shkre­li’s ac­tions re­sult­ed in loss­es of more than $10 mil­lion — and fed­er­al sen­tenc­ing guide­lines sug­gest that each of those mil­lions could be pun­ished with a year or more in prison.

In the lengthy de­ci­sion, the judge re­viewed Shkre­li’s push for an ac­quit­tal on the three con­vic­tions he now faces sen­tenc­ing on. And she knocked back each ar­gu­ment, agree­ing with the ju­ry’s de­ter­mi­na­tion that Shkre­li — who aroused a storm of crit­i­cism by his de­ci­sion to jack up the price of an old drug by more than 5,000% — had brazen­ly lied re­peat­ed­ly to his in­vestors about the per­for­mance of his in­vest­ments with their mon­ey, and the amount of cash he had to work with.

The most im­por­tant part was her as­sess­ment of the loss­es that could be at­trib­uted to each of the counts. Shkre­li and his at­tor­ney Braf­man ar­gued that by hand­ing over Retrophin shares to the in­vestors in his funds, there was no loss.

The judge, again, de­cid­ed oth­er­wise.

For the pur­pos­es of sen­tenc­ing, the court will  ap­ply a loss amount of $2,998,000 on Count Three, $3,402,450 on Count Six, and $4,000,000 on Count Eight.

That’s $10,400,450.

Why $4 mil­lion for count 8?

The judge ruled that what­ev­er the ac­tu­al loss, Shkre­li had “in­tend­ed” to in­flict fi­nan­cial dam­age on in­vestors who bought Retrophin stock by schem­ing to in­flate the price. That in­ten­tion the judge de­ter­mined could cost Shkre­li dear­ly. From the rul­ing:

Mr. Shkre­li ar­gues that he did not “in­tend” any loss to the mar­ket (Def. Let­ter at 12).  The court finds, based on the tri­al ev­i­dence, that Mr. Shkre­li con­spired with Mr. Greebel and oth­ers to ma­nip­u­late the price and trad­ing vol­ume of Retrophin stock, and there­by at­tempt­ed to cause the share-buy­ing pub­lic to over­pay for the stock.  The court fur­ther finds that a rea­son­able mea­sure of the loss Mr. Shkre­li sought to in­flict is the dif­fer­ence be­tween the price that the un­sus­pect­ing in­vest­ing pub­lic would have paid for Retrophin stock had the con­spir­a­cy been suc­cess­ful, and the val­ue of the shares ab­sent the fraud.

John Cof­fee

John Cof­fee, di­rec­tor of the Cen­ter on Cor­po­rate Gov­er­nance at Co­lum­bia Uni­ver­si­ty Law School, told CN­BC that the rul­ing ex­posed Shkre­li to a sen­tence of a decade or more — de­pend­ing on her will­ing­ness to go easy or hard on the 34-year-old.

Such a find­ing of loss could jus­ti­fy a 10-year sen­tence — or longer. But fed­er­al judges no longer have to fol­low the guide­lines and they are on­ly ad­vi­so­ry. She has great dis­cre­tion as to the sen­tence she im­pos­es; she could rec­og­nize that he is a first of­fend­er and give him mod­est time. Or she could place more em­pha­sis on the amount of the loss and his un­re­pen­tant at­ti­tude.

Giv­en that the judge tossed Shkre­li in fed­er­al jail af­ter he post­ed a boun­ty of $5,000 for a strand of Hillary Clin­ton’s hair, has re­fused to re­turn his $5 mil­lion bond mon­ey while they cal­cu­late pos­si­ble dam­ages and now cal­cu­lates that the biotech ex­ec was re­spon­si­ble for mil­lions in loss­es, some ob­servers might con­clude that the pre­vi­ous­ly un­re­pen­tant Shkre­li may have the book thrown at him. All those stream­ing videos and caus­tic emails giv­ing the fin­ger to every one of his crit­ics may haunt him for years.

Shkre­li, though, is sound­ing a re­pen­tant note in a let­ter to the court, which his lawyer Ben­jamin Braf­man cites in a lengthy ap­peal to the judge to go easy. “I caused this en­tire mess to hap­pen,” Shkre­li states at one point. Then he goes on to dis­cuss how his 5 months in a fed­er­al prison has changed him.

Prison has been both the most fright­en­ing ex­pe­ri­ence in my life but al­so an op­por­tu­ni­ty for me to see a side of the world sel­dom seen or dis­cussed. I have tried my best to make a pos­i­tive im­pact on many of the peo­ple I en­counter here. If I have some­thing to teach my fel­low in­mates, I im­plored them to lis­ten and learn. I have com­fort­ed the for­lorn and for­got­ten men fac­ing long sen­tences, many are se­vere­ly de­pressed, and sad­ly, sui­ci­dal. 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 has nev­er been known to pub­licly say any­thing like that, which is one rea­son why he’s fac­ing a tough judge in a few days.


Im­age: Mar­tin Shkre­li leaves fed­er­al court in June, 2017. Shut­ter­stock

Deborah Dunsire. Lundbeck

UP­DAT­ED: Deb­o­rah Dun­sire is pay­ing $2B for a chance to leap di­rect­ly in­to a block­buster show­down with a few of the world's biggest phar­ma gi­ants

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Bright and early European time Monday morning the company announced that it will pay up to about $2 billion to buy Alder, a little biotech that is far along the path in developing a quarterly IV formulation of a CGRP drug aimed at cutting back the number of crippling migraines patients experience each month. In a followup call, Dunsire also noted that the company will likely need 200 to 250 reps for this marketing task on both sides of the Atlantic. And analysts were quick to note that the dealmaking at Lundbeck isn’t done, with another $2 billion to $3 billion available for more deals to beef up the pipeline.

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Lisa M. DeAngelis, MSKCC

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The mR­NA uni­corn Mod­er­na has more ear­ly-stage hu­man da­ta it wants to show off — reach­ing new peaks in prov­ing the po­ten­tial

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It's not per­fect, but it's a good start: FDA pan­elists large­ly en­dorse Aim­mune's peanut al­ler­gy ther­a­py

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