'Pharma bro' Martin Shkreli released from federal prison and into New York halfway house (original) (raw)

Former pharmaceutical executive Martin Shkreli departs the U.S. District Court for the Eastern District of New York, August 3, 2017 in the Brooklyn borough of New York City.

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Notorious "Pharma bro" fraudster Martin Shkreli was released from a federal prison in Pennsylvania on Wednesday and into a U.S. Bureau of Prisons halfway house at an undisclosed location in New York to complete the rest of his criminal sentence, his lawyer said.

"Getting out of real prison is easier than getting out of Twitter prison," Shkreli, 39, wrote on his Facebook page Wednesday, referring to his ban from Twitter, which dates to his harassment of a female journalist in 2017.

In a throwback to the days when Shkreli was one of the most prominent trolls on Twitter, a friend of his tweeted a photo of them together smiling in a car after his release, with the caption: "Picked up this guy hitchhiking. Says he's famous."

The friend, Edmund Sullivan, was wearing a t-shirt featuring a photo of Shkreli smirking during testimony before Congress, with the words, "Free Shkreli" underneath it.

Sullivan, who did not respond to a request for comment, is a former board member of a drug company Shkreli founded, Retrophin, which now is known as Travere Therapeutics.

He also is mentioned in court documents in Shkreli's criminal case as having been one of seven individuals to have received, at Shkreli's director, thousands of shares in a shell company that was used by Retrophin as a vehicle to become publicly traded. Sullivan was not charged with wrongdoing.

Shkreli, a New York City resident who was convicted of securities fraud in 2017, previously was due to be released from the Allenwood low-security federal correctional institution on Sept. 14.

Shkreli was sentenced to 7 years in prison in March 2018. His release slightly more than four years after that sentencing reflects the credit he received for good behavior in prison, and for completing education and rehabilitation programs while locked up.

It also reflects the fact that Shkreli already had spent nearly six months in jail before he was sentenced. A federal judge revoked his release bond in September 2017, two months after his conviction, after he offered Facebook followers a $5,000 bounty for samples of Hillary Clinton's hair.

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Shkreli's lawyer Benjamin Brafman, in a statement Wednesday, said, "I am pleased to report that Martin Shkreli has been released from Allenwood prison and transferred to a BOP halfway house after completing all programs that allowed his prison sentence to be shortened."

"While in the halfway house I have encouraged Mr. Shkreli to make no further statement, nor will he or I have any additional comments at this time," Brafman said.

A Bureau of Prisons spokesman said Shkreli was transferred to community confinement overseen by the agency's Residential Reentry Management Office.

"Community confinement means the inmate is in either home confinement or a Residential Reentry Center (RRC, or halfway house)," the spokesman said in a statement. "Mr. Shkreli's projected release date from the custody of the BOP is September 14, 2022. For safety and security reasons, we do not discuss any individual inmate's conditions of confinement to include transfers or release plans."

Shkreli gained national infamy in 2015 when his second pharmaceuticals company Vyera summarily raised the price of the lifesaving drug Daraprim by more than 4,000% overnight.

Shkreli earned the sobriquet "Pharma bro" for smugly defending that price increase, for insulting people on Twitter who called out his behavior, and for his purchase of a one-of-a-kind Wu-Tang Clan album for $2 million.

But his criminal conviction is unrelated to the price increase of that anti-parasite medication.

Shkreli was arrested in late 2015 on charges that accused him of defrauding investors at two hedge funds to found his first drug company, Retrophin. He also was charged with looting Retrophin to pay back investors at his hedge funds for losses that he had covered up.

He was convicted at trial in July 2017 in Brooklyn federal court of several charges in the case.

In January, a federal judge banned Shkreli for life from the pharmaceutical industry and ordered him to pay nearly $25 million in civil penalties for engaging in anticompetitive conduct to protect Vyera's profits earned from Daraprim.

Vyera, whose parent company is Phoenixus AG, agreed to pay $40 million to plaintiffs in that same case, which included the Federal Trade Commission and seven states, among them New York and California.

At Shkreli's criminal trial, prosecutors argued that Shkreli conspired with Retrophin's then-lawyer to handpick seven people allied with Shkreli to receive, for nominal amounts, a total of 2 million shares in the shell company that Retrophin used to become publicly traded, "and then sought to exert control over their shares," the trial judge has written.

Sullivan, the friend who picked Shkreli up from prison Wednesday, was one of those seven people to receive the so-called Fearnow shares, named after their original owners, court records show.

Prosecutors have said that Shkreli in 2013 directed Sullivan and another recipient of Fearnow shares to transfer a total of 80,000 shares to pay off a man who had been defrauded by Shkreli at a hedge fund he operated.

A former associate of Shkreli's, Kevin Mulleady, told CNBC on Wednesday that Sullivan is a shareholder in Phoenixus, the parent company of Vyera.

Mulleady is a significant shareholder in Phoenixus.