U.S. Alleges Shkreli Hid Control of Retrophin Shares

  • Shkreli sparked outrage when company hiked price of drug
  • Eight-count indictment adds conspiracy charge, shows e-mails

Martin Shkreli appears before a House Oversight and Government Reform Committee in Washington, D.C., on Feb. 4.

Photographer: Pete Marovich/Bloomberg

Prosecutors filed new charges accusing Martin Shkreli of engaging in more illegal financial maneuvers at his former drug company Retrophin Inc. by using employees and consultants to conceal his control of stock.

The new eight-count indictment, adding a conspiracy charge, sheds more light on e-mail communications between Shkreli and a former corporate lawyer, Evan Greebel, who is accused of helping the notorious biotech founder cover up securities fraud.

Shkreli, who sparked public outrage last year over drug-pricing, is accused in the case of defrauding investors in hedge funds he founded and using $11 million in assets from Retrophin to pay them off. He and Greebel had pleaded not guilty.

"There is nothing in the new indictment that ‎changes the flawed theory of the case as applied to Mr. Shkreli," his lawyer Ben Brafman said in an e-mail Friday.

Asked for a comment through Twitter, Shkreli, 33, responded with a post saying: “dont make me slap you.”

Greebel’s lawyer, Reed Brodsky, declined to comment.

Expanded Indictment

In the expanded indictment, Shkreli is accused of taking control of shares he wasn’t permitted to own, parking them with associates, and using them to help pay debts.

When an employee broke ranks and wanted to sell them instead, Shkreli threatened in an e-mail to sue for “failing to honor the agreement.”

Upon reviewing the e-mail, Greebel warned Shkreli that it was "very risky given what you[r] agreement was -- could be opening a much bigger can of worms."

The criminal case is U.S. v. Shkreli, 15-cr-00637, U.S. District Court, Eastern District of New York (Brooklyn).

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