BY TOM HAYS
The Associated Press
NEW YORK – Martin Shkreli, the former hedge fund manager vilified in nearly every corner of the United States for buying a pharmaceutical company and jacking up the price of a lifesaving drug more than fifty-fold, was arrested Thursday on securities fraud charges unrelated to the furor.
Online, many people took instant glee in his arrest, some of them joking about a judge ratcheting up his sentence or lawyers jacking up their hourly fees 5,000 percent for defending him in his hour of need. His attorneys had no immediate comment.
Shkreli was charged in an indictment unconnected to the drug price hikes imposed by his company Turing Pharmaceuticals. The charges instead involve his actions at another pharmaceutical company, Retrophin, which he ran as CEO up until last year.
Prosecutors said that in a “Ponzi-like scheme” between 2009 and 2014, Shkreli lost hedge fund investors’ money through bad trades, then raided Retrophin for $11 million in cash and stock to pay back his disgruntled clients.
Shkreli “engaged in multiple schemes to ensnare investors through a web of lies and deceit,” U.S. Attorney Robert Capers said in a statement.
Shkreli was charged with securities fraud and conspiracy. A second defendant, lawyer Evan Greebel, of Scarsdale, New York, was charged with conspiracy. It was not immediately clear who would represent Greebel.
If convicted, both men could get up to 20 years in prison.
Shkreli has found himself at the center of a firestorm over drug pricing in the last few months, and he hasn’t been afraid to throw on more fuel.
It began after Turing Pharmaceuticals spent $55 million in August for the U.S. rights to sell Daraprim, a 62-year-old drug for a rare parasitic infection, and promptly raised the price from $13.50 to $750 per pill.
The drug is the only approved treatment for toxoplasmosis, a disease that mainly strikes pregnant women, cancer patients and AIDS patients.
Shkreli said the company would cut the price of Daraprim. Last month, however, Turing reneged.
But he has also unapologetically made a business-is-business argument for the price jump. In fact, he recently said he probably should have raised it more.
“No one wants to say it, no one’s proud of it, but this is a capitalist society, a capitalist system and capitalist rules,” he said in an interview at the Forbes Healthcare Summit this month.
“And my investors expect me to maximize profits, not to minimize them or go half or go 70 percent but to go to 100 percent of the profit curve.”