Shkreli's Ex-Lawyer Threatens to Blow Whistle at Trial

Updated on
  • Co-defendant accuses Shkreli of false filings, illegal trades
  • Villified pharmaceutical executive also wants to split trials

Attorney Evan Greebel exits federal court in New York, on Dec. 17, 2015. Photographer: John Taggart/Bloomberg

Martin Shkreli, the irreverent former pharmaceutical executive battling fraud charges, was accused by his former lawyer of submitting false documents to the U.S. Securities and Exchange Commission and engaging in illegal stock trading.

The lawyer, Evan Greebel, is Shkreli’s co-defendant in the fraud case and is asking a federal judge for a separate trial from his former client. Greebel’s lawyer, Reed Brodsky, said he would essentially aid the prosecution in exposing Shkreli as a cheat and liar in front of jurors if the two men are tried together.

“We have identified records submitted to the SEC that are false and we don’t believe the government knows about them,” Brodsky told U.S. District Judge Kiyo Matsumoto in Brooklyn, New York. “We would be duty bound to destroy Mr. Shkreli’s credibility.”

Shkreli also seeks a separate trial, while prosecutors want them tried together, arguing they’ll both get a fair shake. The charges in the case don’t relate to illegal trading or the allegedly false SEC documents.

At Friday’s court hearing, Benjamin Brafman, Shkreli’s lawyer, called Brodsky’s claim there was evidence unknown to prosecutors “patently false."

Shkreli’s ‘Tornado of Chaos’ Has His Ex-Lawyer Running for Cover

Shkreli was vilified in 2015 for raising the price of a potentially life-saving drug by 5,000 percent. The former chief executive of Turing Pharmaceuticals LLC was charged with securities fraud for allegedly fleecing another biotech company, which he started in 2011.

Prosecutors said he used $11 million of Retrophin Inc.’s assets to pay off investors who lost money in hedge funds he ran. Shkreli is also accused of hiding his control of the company’s unrestricted stock to help pay off his debts.

Trusted Lawyer

Brafman told the judge Friday that Shkreli’s defense would be based in part on his claim that Greebel led him astray. Shkreli “relied” on Greebel and “considered him to be a capable lawyer," Brafman said.

Shkreli’s defense strategy would include convincing jurors that he didn’t have "criminal intent," meaning he’d never planned on defrauding anybody, Brafman said.

Brafman said Shkreli made a “Herculean effort to repay people who lost money,” citing agreements with his former hedge fund customers to repay them. Prosecutors have called those agreements shams.

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

— With assistance by Patricia Hurtado

(Updates with Shkreli’s defense in ninth paragraph.)
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