Feds: keep the lid on Shkreli evidence


Federal prosecutors say that former pharmaceutical executive Martin Shkreli is trying to use a civil suit the government filed against him to get a peek at the evidence that would be used in his criminal trial on securities fraud charges.

In papers filed last Thursday at U.S. District Court in Brooklyn, prosecutors said that they want to protect witnesses in the criminal case from being intimidated by Shkreli. They said that moving forward first with the Securities and Exchange Commission’s civil suit against Shkreli would lead to the early disclosure of information in the parallel criminal case.

However, Shkreli’s attorney Benjamin Brafman argued in a Feb. 11 filing that the civil case should be moved forward because it “jeopardizes Mr. Shkreli’s livelihood, reputation, and future career prospects.”

Shkreli was charged with securities fraud for allegedly running a Ponzi scheme. He allegedly used assets from one of his pharmaceutical companies to pay investors who would have lost money in his hedge funds, according to the charges. He pleaded innocent to charges that carry up to 20 years in prison if he is convicted.

FBI agents arrested Shkreli in his Midtown apartment on Dec. 17.

“He used each subsequent company to pay off defrauded investors from the prior company,” Brooklyn U.S. Attorney Robert Capers said at a news conference at the time.

In its lawsuit, the SEC is seeking an order that would prohibit Shkreli from working as the director of anymore public companies.

Prosecutors scoffed in Thursday’s Brooklyn Federal Court filing at Shkreli’s argument that he is suffering ”reputational harm” from the civil charges, stating that he cannot suffer greater alleged reputational harm than that which was already brought upon him when he was indicted on the parallel criminal charges.

In arguing for the civil suit to be delayed, prosecutors charged in court documents that there was a “well-founded concern of witness intimidation” based on Shkreli’s past behavior.

Potential witnesses in the case are worried that the flamboyant businessman may retaliate if they testify, according to prosecutors. They argue that Shkreli, co-founder of the biotechnical firm Retrophin and founder of the Turing Pharmaceuticals company – who is best known for exponentially raising the price of an AIDS drug called Daraprin – has a history of threatening and intimidating his co-workers.

“In interviews with the government, several witnesses have advised that have been threatened by defendant Shkreli in connection with past disputes they had with defendant Shkreli, whether of a personal or professional nature,” prosecutors alleged in the motion filed Thursday.

Brafman called allegations that Shkreli is a threat “preposterous.” He said in a statement that Shkreli’s intellect is intimidating to “mere mortals.” He will file papers in response to the prosecutors’ motion for stay by Thursday, according to court records.

Shkreli pinned a message to his Twitter account saying, “I am confident I will prevail. The allegations against me are baseless and without merit.”

Photo: Martin Shkreli testifies before the House Committee on Oversight and Government Reform. Source: House of Representatives via Wikipedia.

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