Shkreli was ‘own worst enemy,’ juror believes
NEW YORK — Martin Shkreli, a juror at his fraud trial said Monday, was “his own worst enemy.”
On Aug. 4, after a fiveweek trial and five days of deliberations, the jury found Shkreli guilty on three of eight counts. He was convicted of securities fraud — for lying to hedge-fund investors — and of conspiracy to commit securities fraud, with a stock scheme surrounding Retrophin, a pharmaceutical company he founded. He faces as much as 20 years in prison; a sentencing date has not been set.
“All he had to do was to tell everyone, ‘I’m sorry, I lost the money, all I can say is I’m sorry,’ and that would be it,” said the juror, Lois Pounds, contacted Monday after Judge Kiyo Matsumoto ordered juror names in the case released to reporters. “But there’s a side of him — I think it’s partly ego — that he wanted to be thought of as this great financial individual.”
Jurors believed that Shkreli committed fraud in lying to hedge fund investors, Pounds said, but as they parsed through the required elements for all eight counts he was charged with, they did not find “that he had the intent and purpose to specifically rob and cause a person to lose money and property” in all of the counts.
The jury found him not guilty of five charges: two securities fraud conspiracy charges and two wire fraud conspiracy charges with regard to the hedge funds, and a charge of defrauding Retrophin by routing money from it to his hedge fund investors.
Pounds, a retired procurement specialist for utility Consolidated Edison, said Monday that “most of us agreed that there was a little something off with him.”
She cited testimony from government witnesses on cross-examination that Shkreli slept in his office or spent days cloistered in a hotel room, telling a Retrophin executive his medication was being adjusted.
However, she said, that was “not enough (to show) that he was incompetent.”
“There’s a good side to him, in which he wanted to make everyone whole,” she said, referring to how he tried to pay back investors who had lost money in his hedge funds — through, the government argued, illegal means.
Pounds said the jury had not taken an initial vote, though the jurors had discussed it. Instead, she said, they went through the counts one by one. “We took each charge and broke it down based on the judge’s instructions,” she said. “There was a lot of going back and forth, a lot of debate, particularly on the conspiracy charges.”
She said that on finding Shkreli not guilty on the count of defrauding Retrophin, the jurors had looked at one consulting agreement that the government had argued was fraudulent, and the defense had said Shkreli thought was legitimate. It was from Lee Yaffe, an acquaintance of Shkreli’s. Yaffe’s father had invested in, and lost money in, an early hedge fund of Shkreli’s.
Eventually, to get his father’s money back, Yaffe said, he signed a consulting agreement with Retrophin, which specified that he would handle work on cluster-headache research and other services. He knew nothing about them: He was “flying blind when it comes to cluster headaches,” he testified.
On cross-examination, though, Shkreli’s lawyer Benjamin Brafman showed that Yaffe had received articles from the firm about cluster headaches, and that Yaffe had discussed the headache topic using technical terms like “mechanism of action” on calls with Retrophin.
When Yaffe said the calls were just a couple of minutes, Brafman asked, “So it’s, ‘Hello, Lee, cluster headaches, mechanism of action, see you later’; is it that type of call?”
Pounds, the juror, said that “a number of us felt that the intent was for Yaffe to actually be a consultant — but I don’t think Yaffe intended to be a consultant.”
That count carried the most weight in terms of potential prison time, since the suggested sentences in white-collar cases are based on the amount of actual or intended loss, and this had the most loss associated with it. His lawyers have said that with the notguilty finding on this count, they may argue no money was lost, as his hedge-fund investors were ultimately repaid.