April 1, 2019
Thomas Brewster - Forbes Staff
Earlier this month, the much-maligned pharmaceutical businessman and uber troll Martin Shkreli was put in solitary confinement at Federal Correctional Institution in Fort Dix, New Jersey, Forbes has been told by two sources with knowledge of the situation. That came after the Wall Street Journal described how he was using a contraband phone to run his pharma business from behind bars.
The Bureau of Prisons (BOP) wouldn’t confirm that Shkreli had been placed in solitary confinement, saying it would not release information about “an individual inmate's conditions of confinement.” But it confirmed that the issues raised in the Journal article were “under investigation.”
“When there are allegations of misconduct, they are thoroughly investigated, and appropriate action is taken if allegations are sustained,” a spokesperson for the BOP added. Shkreli’s lawyer, Benjamin Brafman, declined to comment on his client’s status.
One source close to Shkreli’s legal team said the fraudster was in the special housing unit (SHU) a week and a half after the article was published on March 7, but the source had not received an update on his status. But according to Justin Liverman, a fellow inmate and ex-member of notorious hacker crew Crackas With Attitude, Shkreli was indeed put in solitary and was still there as of Sunday. “Martin is in the SHU,” Liverman wrote to Forbes through the prison email system.
According to the Journal, Shkreli was operating his business, Phoenixus AG, via a cellphone. The company appears to be a reincarnation of Turing Pharmaceuticals AG, which jacked up the prices of rare drugs to the fury of patients, doctors and insurers. In one of the worst examples, Turing increased the cost of a pill for patients with HIV/AIDS from $13.50 to $750. Shkreli plans to continue in the pharma game and even sees Phoenixus becoming a multibillion-dollar enterprise with him as inmate-in-charge. Earlier this year he even fired the firm's interim CEO over the phone, though he let him stay on the board, according to Journal sources. This all came in Shkreli’s first year in Fort Dix; he was sentenced to seven years for committing securities fraud and securities fraud conspiracy.
Using a cellphone behind the vast redbrick walls of Fort Dix is against the rules, but Liverman claims it isn’t difficult to obtain one. Fort Dix is like a "cellphone heaven.... There are hundreds of phones on this compound. You can either rent phone time or buy one for $1,000," says Liverman, who was given a five-year sentence for his involvement in the hacker crew Crackas With Attitude. In the outfit's most notorious attack, they broke into the AOL account of then-CIA director John Brennan and shared emails and files with Wikileaks.
Fort Dix has had problems with contraband phones before. In the past year, guards caught inmates sharing child pornography using smuggled devices. In another incident in 2018, prisoner Omar Adonis Guzman-Martine was sentenced to an additional 30 years for using a cellphone to organize an attack on his girlfriend and murder her boyfriend.
Over the past three months, Forbes has been in intermittent contact with Liverman, though this publication agreed to not disclose over what communication channels. He says he has become good friends with Shkreli. He also says the former pharma boss was housed in a different wing at Fort Dix, but he dropped in for personal, one-on-one lessons about economics from Shkreli, though he admits he can’t always follow him.
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