NEW YORK (Reuters) – A U.S. prosecutor on Thursday urged jurors to convict former drug company executive Martin Shkreli of defrauding investors in his hedge funds and stealing from his old company to repay them.
In a five-hour closing argument capping off a month-long trial, Assistant U.S. Attorney Alixandra Smith told jurors in Brooklyn federal court that Shkreli told “lies upon lies” over the course of five years.
“Only you can see the whole picture,” she said to the jurors.
Shkreli, 34, is best known for raising the price of anti-infection drug Daraprim to $750 a pill, from $13.50 in 2015, when he was chief executive of Turing Pharmaceuticals. The increase sparked outrage from patients and U.S. lawmakers and earned him the nickname “pharma bro.”
The fraud and conspiracy charges he now faces relate not to Turing but to Shkreli’s management of his previous drug company, Retrophin Inc, and hedge funds MSMB Capital and MSMB Healthcare between 2009 and 2014.
Shkreli’s lawyers have emphasized in their cross-examinations that his investors did not lose money in the end. In his opening argument for Shkreli last month, lawyer Benjamin Brafman portrayed Shkreli as an awkward misfit who never intended to defraud anyone, and who was in fact manipulated and exploited by investors and other associates for his “genius.”
Smith on Thursday led jurors through what she described as a series of frauds, beginning in 2009 when Shkreli began wooing investors for MSMB Capital. Shkreli falsely claimed the fund had an outside auditor and managed assets worth tens of millions of dollars, Smith said.
Smith told jurors that Shkreli lost all the investors’ money in 2011 but covered up the loss with fabricated performance reports, which she called the “most significant lies in this case.”
She said Shkreli used his other fund, MSMB Healthcare, as a vehicle to funnel money into Retrophin, which he founded in 2011, while claiming it was a hedge fund with diverse assets.
Eventually, Smith said, Shkreli paid back investors with shares and cash from Retrophin, using fraudulent settlement and consulting agreements.
“This was just a sham,” she said of one consulting agreement. “It was a way to pull money out of Retrophin, a public company, to pay back debts that were owed by the defendant.”
A lawyer for Shkreli will deliver a closing argument Thursday afternoon. Shkreli’s defense team did not call any witnesses in the case.
Reporting by Brendan Pierson in New York; Editing by Steve Orlofsky