- Government claims witnesses fear ex-pharma boss in fraud case
- Judge urged to delay SEC lawsuit against Martin Shkreli
Martin Shkreli’s intellect might be intimidating to “mere mortals” but he’s no threat to anyone, according to his lawyer. The attorney’s boast was in response to government claims that potential witnesses fear the former pharma executive will retaliate if they testify in a criminal fraud case.
Shkreli, the biotechnology company founder best known for raising the price of a drug for a rare disease by more than 5,000 percent, has a pattern of threatening or intimidating those who come into conflict with him, worrying potential witnesses in his criminal case, the prosecutors said in a court filing Thursday in Brooklyn, New York, federal court.
They cited a letter to the wife of a former Retrophin Inc. employee in which Shkreli vowed to do everything he could to make sure the family ended up homeless.
“Any claim that Martin Shkreli intimidates witnesses is preposterous,” Ben Brafman, the former executive’s lawyer, said Friday in an e-mailed statement. “While his keen intellect can at times be intimidating to mere mortals, nothing else about Martin Shkreli is intimidating at all.”
Shkreli allegedly “reached out” to someone last year after learning about the criminal investigation “and suggested that the witness agree to a false version of certain events,” according to the prosecutors. They said “several witnesses have advised that they have been threatened by defendant Shkreli in connection with past disputes.”
Shkreli, 32, is charged with illegally using Retrophin’s assets to pay investors who lost money in hedge funds he ran. He’s also facing civil claims brought by the U.S. Securities and Exchange Commission.
Shkreli faces a maximum of 20 years in prison if convicted. The SEC is seeking monetary penalties and an order barring him from serving as an officer or director of a public company.
Prosecutors described what they called Shkreli’s pattern of threats to co-workers and others who disagree with him in a filing urging U.S. District Judge Kiyo Matsumoto to delay the SEC case while they pursue the criminal charges.
Shkreli has asked to move forward with the SEC case, arguing that his livelihood and reputation are at stake.
One of Shkreli’s former employees at Retrophin, a biotech company that specializes in developing treatments for rare diseases, accused him of a harassment campaign in a dispute over a share grant. The matter was unrelated to the fraud allegations and was raised by prosecutors as an example of past conduct.
“Your husband has stolen $1.6 million from me and I will get it back. I will go to any length necessary to get it back,” Shkreli wrote Timothy Pierotti’s wife in a January 2013 letter, according to court filings.
“I hope to see you and your four children homeless and will do whatever I can to assure this,” Shkreli wrote.
Brafman declined to comment on Pierotti’s claims.
Retrophin sued Pierotti in Manhattan state court in 2013 and accused him of reneging on a promise to seek out acquisition targets and of "absconding with the stock." The suit was later dropped.
Pierotti also accused Shkreli in court filings of hacking into his Facebook, Gmail, LinkedIn, AOL and Twitter accounts, and posting copies of Retrophin’s complaint against Pierotti.
In December 2013, Pierotti filed a formal complaint against Shkreli with a local police department in New Jersey where Pierotti and his family live. Public records show that an officer contacted Shkreli by telephone and warned the former executive to stop bothering the Pierottis.
The civil case is Securities and Exchange Commission v. Shkreli, 15-cv-07175; and the criminal case is U.S. v. Shkreli, 15-cr-00637, U.S. District Court, Eastern District of New York (Brooklyn).