SHKRELI: CHRONIC LIAR OR TROUBLED GENIUS?
Lawyers go on offensive in closing arguments as fraud trial nears end
The criminal fraud trial of so-called “pharmacy bro” Martin Shkreli neared a close Thursday amid sharply clashing legal arguments, conflicting claims about lies and even a sexual innuendo.
A federal prosecutor argued evidence showed the New York pharmaceutical entrepreneur was a habitual liar who defrauded health care investors in a Ponzilike scheme. But a defense attorney called the claims of prosecution witnesses who testified they were misled by Shkreli “rich people B.S.”
Kicking off a day that featured about six hours of sharply clashing closing arguments, Assistant U.S. Attorney Alixandra Smith said evidence showed that Shkreli told “lies upon lies upon lies” in four related frauds, then “doubled down” to hide his deceit.
It is time “to pull back the curtain on these ... fraud schemes, and finally see the truth behind all these lies,” Smith told the jury of seven women and five men, arguing that the government had proved Shkreli’s guilt “beyond a reasonable doubt.”
In response, defense attorney Benjamin Brafman described Shkreli as a troubled genius who may have said or done things that seemed incorrect. But he insisted Shkreli believed what he said, and for two years he spent nights in an office sleeping bag ensuring that a string of wealthy investors got their money back — with hefty gains.
“If Martin Shkreli says what he believes is true, I submit that’s an act of good faith,” said Brafman, who added, “and you must acquit.”
The arguments presented the jurors with a contrast of both legal arguments and courtroom styles. Smith discussed legal elements required for the eight fraud and conspiracy charges in the case, while Brafman joked about his client’s annoying persona and cited a witness who likened Shkreli to Rain Man, the title character of the 1988 movie in which actor Dustin Hoffman portrayed an autistic savant.
The jurors were expected to begin deliberations Friday.
Shkreli, 34, a Manhattan resident, occasionally whispered to one of his attorneys and smiled or took notes during the day’s arguments. He opted not to testify in his own defense, a decision that spared him from being cross-examined by prosecutors.
Shkreli is best known as the former Turing Pharmaceuticals CEO who ordered a 5,000% price hike in 2015 on Daraprim, a medication used to treat toxoplasmosis, a parasitic illness that typically strikes those with the AIDS virus and others with weakened immune systems. He never apologized or backed away from the decision, which brought him international notoriety as well as criticism from some 2016 presidential candidates.
Instead, the case against Shkreli focuses on charges he defrauded investors in MSMB Capital and MSMB Healthcare, hedge funds he co-founded. When the funds cratered, in part due to disastrous Shkreli trading, he alleg- edly repaid the investors by looting stock and money from Retrophin, another pharmaceutical company he launched and led.
Shkreli faces up to 20 years in prison if convicted.
Federal prosecutors called witnesses who testified that they viewed Shkreli as extremely knowledgeable about health care companies and their drugs — but also someone who misled or lied to them.
Contradicting rosy account statements in which Shkreli reported steady gains for investors, government evidence showed the hedge funds held little money and virtually none of the promised stock investments.
Prosecutors also showed the jury a darker side of the businessman. Tim Pierotti, who ran one of the hedge funds, testified that his wife received a 2012 letter from Shkreli that falsely accused him of stealing $1.6 million.
Labeling the fund employee as a “pathetic excuse of a husband,” the letter said Pierotti “needs to get a real job that does not depend on fraud to succeed.”
“I hope to see you and your four children homeless,” the Shkreli letter added. “I will do whatever I can to assure this.”
Shkreli’s attorneys put on no defense case. Instead, they aggressively cross-examined the prosecution witnesses, eliciting grudging acknowledgments that all who invested with Shkreli ultimately came out ahead.
Brafman attacked the witnesses again in his closing argument, arguing several had lied. He also questioned testimony in which Steven Richardson, a former Retrophin chairman who is gay, said Shkreli suggested he might be gay, too. Actually, Richardson tried to seduce Shkreli, Brafman suggested.
Accusing Smith of “ignoring ” testimony contradictions during the prosecution’s closing arguments, Brafman told jurors: “I’m not offended, but you should be.”
The no-harm, no-foul defense strategy seemed aimed at convincing panel members that Shkreli’s laser focus on building his companies and unshaken belief in his corporate “mission” outweighed any legal or regulatory lines that may have been crossed. Under U.S. law, however, repayment of investors does not erase any acts of fraud.
“If Martin Shkreli says what he believes is true, I submit that’s an act of good faith, and you must acquit.” Attorney Benjamin Brafman