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. (Photo: Drew Angerer, Getty Images)
When a judge sentences former Retrophin CEO Martin Shkreli on March 9 for his federal securities fraud conviction, the sentence is likely to be more severe than the defense team was hoping it would get. New York District Court Judge Kiyo Matsumoto ruled Monday that the losses Shkreli caused by his misdeeds amounted to $10.4 million, according to media reports.
Federal guidelines tend to support giving longer prison sentences if losses from the crime are high. But John Coffee, director of the Center on Corporate Governance at Columbia University Law School, told CNBC the judge has broad discretion.
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“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,” Coffee said.
It’s possible she could give Shkreli a light sentence since this is his first offense. But given his behavior in court, and the fact that his bail was revoked for posting on social media that he would pay for a lock of Hillary Clinton’s hair, that may be unlikely.
“This is why most defense counsel instruct their client to appear modest and humble at their trial. Shkreli was the opposite and may pay a high price for his arrogance,” said Coffee.
The judge dismissed arguments by Shkreli’s lawyers that there was no actual loss when Shkreli’s hedge funds shut down because Shkreli paid hedge fund investors back their money with cash and stock in the drug company he founded, Retrophin, according to CNBC.
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Courthouse News Service noted that the court was still figuring out the amount Shkreli will owe the government in forfeitures. So far, prosecutors have ordered him to pay $7.3 million in cash and assets including a Picasso painting, an unreleased album by Lil Wayne, and the only copy of the Wu-Tang Clan’s leather-bound album “Once Upon a Time in Shaolin.”
