“The drug was unprofitable at the former price, so any company selling it would be losing money”, Shkreli said in his defense, to CBS News.
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He is accused of fraud relating to a drug company he previously headed, Retrophin, and a hedge fund, MSMB Capital Management, where he was a fund manager.
Brooklyn U.S. Attorney Robert Capers said at a press conference yesterday, ‘Shkreli essentially ran his company like a Ponzi scheme where he used each subsequent company to pay off defrauded investors from the prior company’.
The SEC’s lawsuit detailed a timeline for the allegations: Shkreli told investors in his hedge fund that he had a prominent industry auditing firm, which he did not. KaloBios is also represented by Painter.
Records have it that Shkreli has a past of having deceived financiers in one hedge to enable the paying off of debts from another.
He was later bailed on payment of a $5m (£3.3m) bond package and allowed home.
Lefcourt said that Shkreli’s high-profile statements and actions in recent months “raises his profile to a degree that could be devastating to him if he ever has to face a judge at sentencing”.
This could also mean that he’s forced to give back the one-of-a-kind, never-heard copy of the Wu-Tang Clan album Once Upon A Time In Shaolin, which he bought for $2million.
In September, Shkreli gained notoriety when his current company, Turing Pharmaceuticals, raised the price of Daraprim from .50 (12.50 euros) a tablet to 0 after acquiring the drug’s license. The move sparked outrage on the presidential campaign trail and helped prompt a Capitol Hill hearing on drug prices. A spokesman said they could not take money “from this poster boy for drug company greed”. Hillary Clinton railed against Shkreli, saying he was guilty of price gouging.
The BBC even dubbed him the “most hated man in America”.
Shkreli, the chief executive of the company, specialises in buying patents on cheap drugs and then hiking their price.
Shkreli recently became the CEO of a second company, KaloBios Pharmaceuticals, Inc., based in South San Francisco, California.
Turing has offices in NY and Zug, Switzerland.
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Lefcourt said that the way the judge who handles Shkreli’s criminal case views his public conduct could affect the judge’s decision on pretrial motions and arguments, which in turn can affect Shkreli’s chances of beating the charges.
