Feb. 26 (UPI) -- A federal judge ruled Monday that former Turing Pharmaceuticals CEO Martin Shkreli cost investors more than $10.4 million in a Ponzi scheme.
U.S. District Judge Kiyo Matsumoto found that Shkreli, 34, lied to investors in a hedge fund to encourage them to put up $6.3 million and lost $4 million belonging to investors from another fund by funneling their money into a drug company he founded, called Retrophin Inc.
Prosecutors argued Shkreli caused between $9 million and more than $20 million in losses.
Shkreli's lawyers argued he caused no loss and hoped he would receive a sentence of 16 months or less, as he paid hedge fund investors their money back and more with cash and stock in Retrophin.
Matsumoto ruled Shkreli shouldn't receive credit for paying the investors back because he only returned the money after they had become suspicious of the scheme.
"By the time Mr. Shkreli began to funnel money from Retrophin to his MSMB Capital investors, many of those investors, as well as the Securities and Exchange Commission, had detected the fraud," she said.
Shkreli's lawyer, Benjamin Brafman, said he was "disappointed by the ruling but still hopeful that the court will find it in her heart to impose a reasonably lenient sentence."
Shkreli is being held in a Brooklyn, New York, federal jail as he awaits his sentencing on March 9.