Martin Shkreli Was Just Ordered to Forfeit Nearly $7.4 Million to the U.S.

Martin Shkreli must turn over almost $7.4 million to the U.S., a judge ruled in a win for prosecutors who say the hedge-fund manager turned pharmaceutical executive cheated his investors.

The jailed convict is scheduled to be sentenced March 9 for lying to investors in his hedge funds about his track record and performance as well as a fraud that involved Retrophin Inc., a company he founded.

Shkreli had argued that he shouldn’t have to forfeit anything — or just over $500,000 at the most — because he didn’t profit from the crimes. Money from his investors went into the stock market, and he didn’t get anything from a plan to control Retrophin shares, his lawyers have said. Investors ultimately got their money back, and more, through settlements and consulting agreements, Shkreli said.

He also wanted to pay other creditors, including his lawyers, before forfeiting any money — a notion rejected Monday by U.S. District Judge Kiyo Matsumoto in Brooklyn, New York.

Shkreli’s assets include a Picasso, $5 million in cash in a personal trading account, a one-of-a-kind special edition album by the Wu-Tang Clan and shares in Vyera Pharmaceuticals — formerly called Turing Pharmaceuticals, according to prosecutors.|

Matsumoto’s order didn’t identify which assets should be forfeited but ruled the U.S. can seek “substitute assets” if there’s not enough cash.

Prosecutors argued last month that Shkreli cost his investors more than $20 million by inducing them to put millions of dollars into his two hedge funds, which operated essentially like Ponzi schemes. They said he spent investor funds on personal expenses “to maintain the image of a successful hedge fund manager.”

John Marzulli, a spokesman for Brooklyn U.S. Attorney Richard Donoghue, declined to comment on the judge’s decision.

Matsumoto ordered Shkreli jailed in September after he issued a bounty on social media for a sample of former Secretary of State Hillary Clinton’s hair.