Fraud in the News

‘Pharma Bro’ gets 7 years for fraud

Martin Shkreli, 34, a former pharmaceutical executive who became famous by inflating life-saving drug prices, has been sentenced to seven years in prison. His fraud convictions were related to his involvement with Retrophin, the pharmaceutical company he founded in 2011, and two hedge funds he ran. (See Martin Skrekli Sentenced to 7 Years in Prison for Fraud, by Stephanie Clifford, The New York Times, March 9.)

Known by the moniker, “Pharma Bro,” Shkreli is best known for raising the price of a drug, Daraprim, by 5,000 percent. He founded Retrophin in 2011 and prosecutors say he lied to his investors about how well their hedge funds were doing. According to the article, Shkreli’s scheme cost investors more than $10 million. But that’s nothing compared to his overall worth — $27.2 million. Shkreli also must forfeit $7.36 million.

(Also see Pharma Bro’s trial a test for fraud prosecution, by Steve C. Morang, CFE, CIA, CRMA, in the November/December 2017 issue of Fraud Magazine.)

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