Shkreli Described by Prosecutors as Spinning ‘Lies Upon Lies’By and
‘Pharma Bro’ before U.S. jury on charges he cheated investors
Shkreli faces up to 20 years in prison if convicted at trial
Pharma Bro Martin Shkreli is a liar who ripped off his clients, a prosecutor told jurors. His lawyer said the former fund manager may be nuts, but he’s also a genius who made millions for his investors.
Shkreli is on trial in Brooklyn, New York, accused of engineering separate frauds tied to his control of two hedge funds he ran as well as Retrophin Inc., a pharmaceutical company he founded in 2011.
Shkreli convinced investors “he was a Wall Street genius, but in reality he was just a con man,” Assistant U.S. Attorney Karthik Srinivasan said at the start of the trial. “Lies upon lies upon lies. This is what this defendant, Martin Shkreli, did for years.”
Prosecutors began presenting their case Wednesday after lawyers selected a panel of seven women and five men to hear the case. Dozens of people were rejected over more than two days after voicing contempt for the former executive who gained notoriety for raising the price of a potentially life-saving drug by 5,000 percent.
Shkreli’s lawyer, Benjamin Brafman, urged the jury to keep an open mind despite his client’s infamy.
“Is he strange? Yes,” Brafman told the jury. “Will you find him weird? Yes.”
But investors turned to Shkreli and relied on his brilliance to make money, Brafman said. They never questioned Shkreli’s odd behavior because he was making them millions and millions of dollars, he said.
“People who claim to be victims have made millions,” Brafman said. “They were investing in Martin, Martin, Martin, the genius.”
Shkreli is known across social media for broadcasting much of his life online. In the weeks leading up to his trial, he spent hours on YouTube live-streaming himself petting his cat, combing his hair and playing chess. He has amassed more than 80,000 followers on Facebook and been barred from Twitter for harassing a female journalist.
Shkreli appeared confident just before opening arguments were delivered, telling a friend in the courtroom, “The next three hours will be some of the most interesting I’ve ever seen.”
He beamed with delight as Brafman, standing at the defense table next to him, listed a series of names that his client had been labeled with over the years, including “Rain Man” and an “odd duck.”
“As Lady Gaga said, ‘He was born this way,’ and it has nothing to do with this
trial,” Brafman told jurors.
Prosecutors paint a different picture. They said Shkreli repeatedly lost money for investors and lied to them. He then took assets from Retrophin to pay them off. He faces as long as 20 years in prison if convicted.
His losses and lies began as soon as he started managing other people’s money, according to prosecutors. While working at New York-based hedge fund Elea Capital at age 23, he lost all the investors’ money, they said.
Shkreli began MSMB Healthcare with about $5 million from investors and paid himself more than the agreed-on 1 percent management fee and 20 percent profit incentive, prosecutors said. He then siphoned money out of Retrophin to pay off his hedge fund investors, they said.
"He used the new money to keep gambling with other people’s money,” Srinivasan said, describing a classic Ponzi scheme.
Shkreli was ousted from Retrophin in September 2014 and later founded Turing Pharmaceuticals AG. While running the company in 2015, he raised the price of Daraprim 5,000 percent overnight, which isn’t part of the case.
Shkreli’s lawyer promised the jury a good show in the weeks ahead.
"Buckle up your seat belts ladies and gentlemen, you’re in for a good ride.”
Shkreli left the courtroom at the end of the day, smiling broadly.
The case is U.S. v. Shkreli, 15-cr-0637, U.S. District Court, Eastern District of New York (Brooklyn).
— With assistance by Christie Smythe
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