Pharma CEO behind price-gouging scandal jailed for fraud
MARTIN Shkreli, the eccentric former pharmaceutical CEO notorious for a price-gouging scandal and for his snide "Pharma Bro" persona on social media, was convicted on Friday on federal charges he deceived investors in a pair of failed hedge funds.
A jury in Brooklyn, New York, deliberated five days before finding Shkreli guilty on three of eight counts. He had been charged with securities fraud, conspiracy to commit securities fraud and conspiracy to commit wire fraud.
Prosecutors had accused Shkreli of repeatedly misleading investors about what he was doing with their money.
Mostly, he was blowing it with horrible stock picks, forcing him to cook up a scheme to recover millions in losses, they said.
Shkreli, 34, told "lies upon lies," including claiming he had $US40 million ($50 million) in one of his funds at a time when it only had about $US300 in the bank, Assistant US Attorney Alixandra Smith said in closing arguments.
But the case was tricky for the government because investors, some wealthy financiers from Texas, testified at the trial conceded that Shkreli's scheme actually succeeded in making them richer, in some cases doubling or even tripling their money on his company's stock when it went public.
The defence portrayed them as spoiled "rich people" who were the ones doing the manipulating.
The sketch artist drawing of Martin Shkreli from his trial his fantastic pic.twitter.com/OprAxF3kvC— Colin Sullender (@shiruken) June 28, 2017
"Who lost anything? Nobody," defence lawyer Ben Brafman said in his closing argument. Some investors had to admit on the witness stand that partnering with Shkreli was "the greatest investment I've ever made," he added.
For the boyish-looking Shkreli, one of the biggest problems was not part of the case - his purchase in 2014 of rights to a lifesaving drug that he promptly raised the price from $US13.50 to $US750 per pill.
Several potential jurors were kept off the panel after expressing disdain for the defendant, with one calling him a "snake" and another "the face of corporate greed."
The defendant also came into the trial with a reputation for trolling his critics on social media to a degree that got him kicked off Twitter and for live-streaming himself giving math lessons or doing nothing more than petting his cat, named Trashy.
Among his other antics: boasting about buying a one-of-a- kind Wu-Tang Clan album for $US2 million.
During about a month of testimony, Shkreli appeared engaged at times, grinning when his lawyer described him as a misunderstood misfit. Other times he looked bored, staring into space and playing with his hair.
Shkreli, who comes from an Albanian family in Brooklyn, was arrested in 2015 on charges he looted another drug company he founded, Retrophin, of $US11 million in stock and cash to pay back the hedge fund investors.
Investors took the witness stand to accuse Shkreli of keeping them in the dark as his scheme unfolded. "I don't think it mattered to him - it was just what he thought he could get away with," said Richard Kocher, a New Jersey construction company owner who invested $US200,000 with Shkreli in 2012. "It was insulting."
Shkreli didn't testify. But rather than lay low like his lawyers wanted, he got into the act by using Facebook to bash prosecutors and news organisations covering his case. In one recent post, he wrote, "My case is a silly witch hunt perpetrated by self-serving prosecutors. ... Drain the swamp. Drain the sewer that is the (Department of Justice.)"
The judge ordered Shkreli to keep his mouth shut in and around the courtroom after another rant to new reporters covering the trial.
Prosecutors "blame me for everything," he said. "They blame me for capitalism."