“pharma bro” Martin Shkreli found guilty of fraud, faces up to 20 years in prison
Martin Shkreli, the “pharma bro,” onetime Collect Records backer and owner of that one-of-a-kind Wu-Tang Clan album, has been found guilty on three of eight counts of security fraud. He had been arrested back in December 2015, accused of defrauding investors and a pharmaceutical company. A federal jury gave their verdict Friday afternoon (8/4) after a five week trial in Brooklyn, and Shkreli faces up to 20 years in prison. From The New York Times:
The conviction, even as a mixed verdict, was a shattering defeat for the divisive Mr. Shkreli, who said before the trial that he was “so innocent” that the judge, jury and prosecutors would apologize to him afterward.
Mr. Shkreli was accused of securities and wire fraud related to two hedge funds he ran, MSMB Capital and MSMB Healthcare. Prosecutors charged he then illegally used a pharmaceutical company he founded, Retrophin, to repay the defrauded MSMB investors.
The prosecution brought forth an “avalanche” of evidence, as the prosecutor Jacquelyn Kasulis put it in her rebuttal argument, that included a threatening letter he sent to the wife of a former employee, statements he sent to MSMB investors showing great returns at the same time he had no money in fund accounts, three versions of a backdated agreement to make it look as if MSMB Capital had invested in Retrophin when it had not, as well as claims about assets under management that were wildly out of line with his actual fund size.
The defense, which did not call any witnesses, focused on a few themes:
A major factor was Mr. Shkreli’s state of mind, as a fraud conviction requires the defendant to knowingly commit fraud. The defense asked why Mr. Shkreli, if he wanted to commit fraud, didn’t commit fraud: He ultimately paid back his investors with shares of Retrophin, which became valuable, along with cash. His lawyers also asked how Mr. Shkreli profited, painting him as a hardworking oddball who, rather than throwing in the towel after his funds imploded, vowed to get his investors’ money back. He paid them back late, they argued, but he paid them back.
Following the verdict, Shkreli said, according to MSNBC, “I think we are delighted in many ways. I’m delighted the jury did its job … maybe they found one of two broomsticks, but at the end of the day we were acquitted of the most important charges in this case.” He also took to a new twitter account to comment on the verdict, saying “After that witch hunt, I’ll take it. MSMB investors tripled their money, on average, EXCLUDING any settlements.”
Acting United States Attorney Bridget Rhode, whose office prosecuted Shkreli, said, “We’re gratified as we stand here today at the jury’s verdict.”