Aug. 4 (UPI) — A jury on Friday found Martin Shkreli, the pharmaceutical executive who came under scrutiny for hiking the cost of a drug by 5,000 percent, guilty on three counts related to securities fraud.
The fraud charges are unrelated to the drug price hike, and have to do with a Ponzi scheme he ran between 2009 and 2014 in which he bilked investors out of a total of $11 million.
“When you lie to people knowingly and intentionally to get their money, it’s a crime,” federal prosecutor Jacquelyn Kasulis said in closing arguments July 28. “And that is exactly what Martin Shkreli did. He knowingly lied over and over again to his investors.”
Prosecutors said Shkreli illegally took stock from his biotechnology firm, Retrophin Inc., and used it to pay off debts from a failed hedge fund — which is illegal. The Retrophin board of directors later sued Shkreli and he was ousted from the company for which he served as CEO.
Shkreli is accused of fraudulently reclassifying a $900,000 equity investment as a loan from his defunct hedge fund, MSMB Capital Management, after it lost millions — and made Retrophin pick up the tab.
Defense attorneys argued that Shkreli’s investors were repaid, meaning he’s already made reparations.
Prior to his arrest for securities fraud, Shkreli made headlines in August 2015 involving another company for which he served as CEO, Turing Pharmaceuticals. That company acquired Daraprim — a drug often used to treat toxoplasmosis in people with compromised immune systems, like AIDS patients — and immediately increased the price of the drug by 5,000 percent. The hike raised the average treatment costs from about $1,130 to $63,000 per year.
Although toxoplamosis is not considered dangerous in people who are generally healthy, for people who are pregnant or have a weakened immune system the effects of the infection can be severe. Daraprim is also used to treat malaria.