No­to­ri­ous ‘Pharma Bro’ guilty of fraud

‘Pharma Bro’ guilty on 3 charges but not on most se­ri­ous, which he claims as a win.

Los Angeles Times - - FRONT PAGE - By Bar­bara Demick and Matt Hansen bar­bara.demick @la­times.com Hansen is a spe­cial cor­re­spon­dent.

Martin Shkreli, widely de­nounced for rais­ing drug prices, claims vic­tory with a split ver­dict.

NEW YORK — Busi­ness­man Martin Shkreli, once dubbed the “most hated man in Amer­ica” for rais­ing prices for crit­i­cal drugs, was found guilty Fri­day of two counts of se­cu­ri­ties fraud and one of con­spir­acy in a fed­eral court in Brook­lyn.

The baby-faced and gut­ter-mouthed 34-year-old, of­ten known as “Pharma Bro,” had been charged with eight counts of se­cu­ri­ties fraud and con­spir­acy to com­mit both se­cu­ri­ties and wire fraud.

He was ac­quit­ted of five of the charges, in­clud­ing the most se­ri­ous, which al­lowed Shkreli and his de­fense team to claim vic­tory.

Pros­e­cu­tors claimed that Shkreli ran what was ef­fec­tively a Ponzi scheme, de­fraud­ing in­vestors by ex­ag­ger­at­ing his own cre­den­tials — for ex­am­ple, claim­ing that he at­tended Co­lum­bia Univer­sity. He used their money to cap­i­tal­ize a new drug com­pany, Retrophin, which he then looted to pay them back, they al­leged.

Shkreli was ac­quit­ted on the charges re­lat­ing to Retrophin, but con­victed of mak­ing fraud­u­lent mis­rep­re­sen­ta­tions re­gard­ing two hedge funds he ran.

Dressed in a short­sleeved black polo shirt and khaki pants, Shkreli flashed a grin as he and his at­tor­neys held a news con­fer­ence out­side the court­house.

“This was a witch hunt of epic pro­por­tions. Maybe they found a few broom­sticks, but at the end of the day we’ve been ac­quit­ted of the most im­por­tant parts of this case,” said Shkreli, who de­scribed him­self as “in many ways de­lighted.”

Shkreli has con­tended from the out­set that the gov­ern­ment looked for charges against him be­cause of the no­to­ri­ety he gained in 2015 by hik­ing the price of the an­tipar­a­site drug Dara­prim by more than 5,000% while run­ning an­other drug com­pany, Tur­ing Phar­ma­ceu­ti­cals. Although the trial had noth­ing to do with the drug price con­tro­versy, lawyers had to ques­tion 300 po­ten­tial ju­rors over three days be­fore they were able to seat a panel.

Out­side the court­house, de­fense at­tor­ney Ben­jamin Braf­man said that Shkreli’s dif­fi­cult per­son­al­ity com­pli­cated the case.

“Martin is a bril­liant young man, but some­times his peo­ple skills don’t trans­late,” Braf­man said. He said he would press for a light sen­tence, and if Shkreli is not sent to prison, “You’ll be read­ing about Martin cur­ing rare dis­eases” in the fu­ture.

The charges carry up to a 20-year prison term.

Dur­ing clos­ing ar­gu­ments, As­sis­tant U.S. Atty. Jac­que­lyn Ka­sulis said the four-week trial had “ex­posed Shkreli for who he re­ally is — a con­man who stole mil­lions of dol­lars.”

“It’s time … for Martin Shkreli to be held re­spon­si­ble for his choices, his choices to lie, de­ceive and steal,” she said.

Tes­ti­mony re­vealed an ec­cen­tric worka­holic who spent nights in his of­fice in a sleep­ing bag and rarely brushed his teeth. One in­vestor said Shkreli re­minded him of the Dustin Hoff­man char­ac­ter in “Rain Man.” In­vestors urged him to im­prove his per­sonal hy­giene and to get off of Twit­ter, where he ul­ti­mately ended up be­ing banned for trolling a jour­nal­ist.

Shkreli said there was never any merit to the charges re­lated to Retrophin.

“They the­o­rized that I robbed Peter to pay Paul and the jury has spo­ken con­clu­sively about this,” he said. “My in­vestors made three to five times their money.”

Shkreli also told re­porters he would con­tinue his own law­suit against Retrophin, say­ing his role as chief ex­ec­u­tive there was “ter­mi­nated by some very bad ac­tors,” and that the com­pany at the cen­ter of the se­cu­ri­ties fraud case would “be writ­ing me a very large check in the fu­ture.”

Through­out the jury de­lib­er­a­tions, Shkreli ap­peared largely care­free, read­ing books and some­times tak­ing to so­cial me­dia to com­ment on the case.

Shkreli’s case drew con­flicted re­ac­tions in the busi­ness com­mu­nity.

“Just see­ing Shkreli’s face gives many peo­ple the urge to punch him in the nose,” wrote a colum­nist for Crain’s New York Busi­ness, in an ar­ti­cle later posted by Shkreli on his Face­book page. How­ever, he added, “Upon scru­tiny it is im­pos­si­ble to jus­tify the Her­culean ef­fort the U.S. at­tor­ney’s of­fice ex­pended in this in­ves­ti­ga­tion and prose­cu­tion. Here, the feds lost sight of the sim­ple re­al­ity that there was no vic­tim worth the re­sources wasted.”

Shkreli didn’t take the stand in his own de­fense, in­stead press­ing his case on so­cial me­dia — which has been both his plat­form and his un­do­ing.

At one point, U.S. Dis­trict Judge Kiyo A. Mat­sumoto im­posed a gag or­der on him, but he con­tin­ued to post pro­lif­i­cally — us­ing a pseu­do­nym be­cause he was banned from Twit­ter. He even joked that with his fa­mously off-color vo­cab­u­lary, he was plan­ning his next job — as White House com­mu­ni­ca­tions direc­tor to re­place the re­cently ousted An­thony Scara­mucci.

Justin Lane Euro­pean Pho­to­press Agency

MARTIN SHKRELI, speak­ing af­ter the ver­dict, was con­victed of mak­ing fraud­u­lent mis­rep­re­sen­ta­tions re­gard­ing hedge funds he ran.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.