NEW YORK — Martin Shkreli, the former hedge fund manager under fire for buying a pharmaceutical company and ratcheting up the price of a life-saving drug, is in custody following a securities probe not directly related to those actions.
A seven-count indictment unsealed in Brooklyn federal court Thursday charged Shkreli with conspiracy to commit securities fraud, conspiracy to commit wire fraud and securities fraud. A second defendant, attorney Evan Greebel, of Scarsdale, New York, was charged with conspiracy to commit wire fraud. It was not immediately clear who will represent Greebel in court.
The indictment said the men, along with others, orchestrated three interrelated fraud schemes from September 2009 through September 2014. It said they fraudulently induced investors to invest in two separate funds and misappropriated the assets of a publicaly traded pharmaceutical company, Retrophine Inc., to satisfy Shkreli’s personal and unrelated professional debt obligations.
Calls to an attorney who has represented Shkreli in the past were not immediately returned.
Shkreli was the chief executive officer of Retrophin from December 2012 to September 2014, the court papers said.
Shkreli stirred public outrage earlier this fall when his company, Turing Pharmaceuticals, jacked the price of a drug used to treat a life-threatening infection by more than 5,000 percent. Turing raised the price on Daraprim, a 62-year-old drug whose patent expired decades ago, from $13.50 to $750 per pill. The drug is the only approved treatment for a rare parasitic infection called toxoplasmosis that mainly strikes pregnant women, cancer patients and AIDS patients.
Shkreli said the company would cut the drug’s price. Last month, however, Turing reneged on its pledge. Instead, the company is reducing what it charges hospitals for Daraprim by as much as 50 percent. Most patients’ copayments will be capped at $10 or less a month. But insurance companies will be stuck with the bulk of the tab, potentially driving up future treatment and insurance costs.
Turing, with offices in New York and Switzerland, spent $55 million in August for the U.S. rights to sell Daraprim.