USA TODAY International Edition
Shkreli wins battle for a separate trial
Joint fraud case would place ‘ unfair and heavy burden’ on him, judge rules
Pharmaceutical industry entrepreneur Martin Shkreli on Wednesday won his legal battle to be tried alone in an upcoming criminal securities fraud case.
Brooklyn U. S. District Court Judge Kiyo Matsumoto ruled that trying Shkreli along with a former corporate attorney whose defense rests on painting the poster boy for drug price hikes as a liar “would present a serious risk that Shkreli will not receive a constitutionally fair trial.”
Shkreli is widely known and criticized for helping impose a 5,000% price hike on a potentially life- saving drug used by AIDS sufferers and others with weakened immune systems.
However, his legal jeopardy stems from federal charges that he ran a virtual Ponzi scheme on investors in hedge funds and a pharmaceutical company he founded and previously led.
Shkreli and Evan Greebel, his former outside counsel at the pharmaceutical company called Retrophin, were indicted on securities fraud charges in December 2015.
Wednesday’s ruling means Skreli will be tried on June 26, as previously scheduled, while Greebel will be tried at a later date.
The case focuses on criminal charges that Shkreli siphoned millions of dollars from Retrophin to repay investors he had allegedly defrauded in MSMB Capital and MSMB Healthcare, two defunct hedge funds that focused on health care investments. He is also accused of using company funds to settle personal disputes with investors, unjustly enriching himself with company funds and forming false ties to consultants.
Greebel is accused of aiding the alleged scheme.
Both men have pleaded not guilty. In recent months, each filed motions for separate trials, arguing that their respective defenses were incompatible.
Federal prosecutors opposed any severance.
In her 23- page decision, Matsumoto wrote that the Federal Rules of Criminal Procedure allow separate trials of co- defendants if a single trial “appears to prejudice a defendant or the government.”
She rejected defense arguments that Shkreli and Greebel plan to present “mutually antagonistic” claims when the case goes to trial.
Nonetheless, Matsumoto concluded that a single trial would place “an unfair and heavy burden” on Shkreli, because he would end up “defending himself against both the government and Greebel.”
The judge based her ruling in part on Greebel defense teams plans to characterize Shkreli as a liar while depicting the former corporate counsel as “just another victim” and an unwitting “pawn” in the alleged fraud.
“The underlying theme of Greebel’s defense, that Shkreli lied, committed fraud, and is guilty, will permeate a joint trial to the substantial prejudice of Shkreli,” the judge ruled.
In contrast, Shkreli’s defense team plans to tell trial jurors that he is innocent because he based all of his actions at issue in the fraud case on Greebel’s legal advice.