Shkreli sentencing: Status of his Picasso, rare Wu-Tang Clan album uncertain
What could be the most serious moment in the life of Martin Shkreli, the man convicted of deceiving investors through failed hedge funds seven months ago, has finally arrived.
A judge in the U.S. Attorney’s Office of the Eastern District of New York sentenced the “Pharma Bro” on Friday, about two years after he was escorted out of his Manhattan apartment in a gray hooded sweatshirt by FBI agents.
Shkreli, who is most well-known for raising the price of a potentially lifesaving drug used by AIDS patients 5,000% – to $750 from $13.50 – while at the helm of Turing Pharmaceuticals, was ordered by U.S. District Judge Kiyo Matsumoto on Monday to turn over $7.36 million in assets, which could include a rare Wu-Tang Clan album and painting by Pablo Picasso.
So, what happens if the one-time hedge fund manager-turned pharma exec must turn over the highly-valued possessions?
In a typical situation, assets forfeited by a criminal are transferred to the U.S. Marshals Service (USMS), an agency within the Justice Department. From there, the USMS turns to a contracted auction house, such as Gaston & Sheehan Auctioneers Inc., to sell the items. Gaston & Sheehan currently sells all the jewelry, art, antiques, gold, silver and collectibles seized and forfeited national for the government agency.
The auction house has conducted high-profile auctions that included the sale of property that belonged to James “Whitey” Bulger, a major figure in Boston’s organized crime scene and the leader of the violent Winter Hill Gang. The firm sold the inventory at the Boston Convention Center in 2016, after the items were seized from the Santa Monica, Calif. apartment where Bulger was captured. The items included a replica Stanley Cup ring and a gold and diamond Claddagh ring, according to The Boston Globe. Profits from the auction as well as the $822,000 in cash found in the infamous mobster’s apartment were divided among the families of the 20 people murdered by Bulger or those associated with him, and among others he extorted, according to court filings.
Bernie Madoff, who pleaded guilty to 11 federal felony counts and executed the largest Ponzi scheme in history, had some of his assets sold by Gaston & Sheehan in 2010. A 10.5 carat diamond engagement ring Madoff reportedly gave to his wife, Ruth, sold for $550,000. The former financier and ex-Nasdaq chairman’s monogramed pair of slippers were purchased at the auction for $6,000. Proceeds went to pay the victims of Madoff’s Ponzi scheme.
Another high-profile case which involved forfeited assets hitting the auction block is that of Rita Crundwell, the former Dixon, Ill. comptroller who is serving a 20-year sentence in federal prison for embezzling $54 million from the city’s taxpayers. Crundwell, who stole the money over a 22-year period, used it to fund a successful horse breeding business. The animals, once belonging to the disgraced comptroller and worth millions, were sold at an auction in 2012. Other personal property belonging to Crundwell was also sold at auction.
At this time, it is unknown if Shkreli will turn over the double album called “Once Upon a Time in Shaolin, which he purchased in 2015 for $2 million, or the Picasso painting.