Martin Shkreli must forfeit almost $7.4 million, judge orders
Martin Shkreli must turn over almost $7.4 million to the U.S., a federal judge ruled Monday. It’s a win for prosecutors who say the hedge fund manager turned pharmaceutical executive cheated his investors.
Shkreli, who was convicted and is in jail, is scheduled to be sentenced Friday for defrauding investors in hedge funds he ran by lying to them about his track record and performance as well as a fraud scheme involving Retrophin Inc., a company he founded.
Shkreli had argued that he should have to forfeit nothing — or very little — because he didn’t profit from the crimes. Money from his investors went into the stock market, and he didn’t get anything from his plan to control Retrophin shares, his lawyers have said. Investors ultimately got their money back, and more, through settlements and consulting agreements, Shkreli said.
He also wanted to pay other creditors, including his lawyers, before forfeiting any money — a notion rejected Monday by U.S. District Judge Kiyo Matsumoto in Brooklyn, N.Y.
Shkreli’s assets include a Picasso, $5 million in his personal trading account, a one-of-a-kind special edition album by the Wu-Tang Clan and his shares in Vyera Pharmaceuticals — formerly called Turing Pharmaceuticals, according to prosecutors.
Matsumoto’s order didn’t identify which assets should be forfeited, but it said the U.S. can seek “substitute assets” if there’s not enough cash.
It says the assets won’t be seized until Shkreli has a chance to appeal.
Prosecutors argued last month that Shkreli cost his investors more than $20 million by inducing them to put millions of dollars into his two hedge funds, which operated essentially like Ponzi schemes. They said he spent investor funds on personal expenses “to maintain the image of a successful hedge fund manager.”
Shkreli, 34, is also known for boosting the price of a lifesaving drug by 5,000% and for trolling his critics on social media, where he became known as “Pharma Bro.”
Shkreli was out on bail during his trial last year. But the judge decided to jail him for violating his bail conditions after his social media post offering a $5,000 bounty to anyone who could get a strand of Hillary Clinton’s hair — including the follicle — while she was on a book tour.
The Associated Press was used in compiling this report.
11:20 a.m.: This article was updated with more details about U.S. District Judge Kiyo Matsumoto’s order.
10:30 a.m.: This article was updated with background information about Martin Shkreli, his behavior on social media and why he was jailed.
This article was originally published at 10 a.m.
Your guide to our new economic reality.
Get our free business newsletter for insights and tips for getting by.
You may occasionally receive promotional content from the Los Angeles Times.