Shkreli cost investors, sentencer rules

Martin Shkreli’s hopes of avoiding more prison time for his fraud convictions took a hit as the federal judge who’s going to sentence him ruled his crimes cost investors more than $10 million, rejecting Shkreli’s claim he made them money.

When Shkreli was convicted in August, he proclaimed to be “delighted” with the verdict because he’d been “acquitted of the most important charges” and predicted he’d spend no time in prison. His lawyers said he shouldn’t be imprisoned because he’d been cleared of “the money count.”

But U.S. District Judge Kiyo Matsumoto in Brooklyn, N.Y., rejected those arguments Monday, finding that the former hedge fund manager turned pharmaceutical executive fraudulently induced investors in one of his funds to put up more than $6.3 million and also caused investors in another fund to lose more than $4 million by funneling their money into Retrophin Inc., a company he founded.

The judge’s determination on losses is separate from how much Shkreli may have to pay his victims. Prosecutors say he should surrender $7.4 million and the sentence Matsumoto imposes will be based in part on the amount of investor losses.

Shkreli didn’t manage his hedge fund “for the benefit of investors but instead used it to fund his own personal or unrelated professional debts and to support the development of Retrophin,” Matsumoto said.