Witnesses in Shkreli case worried about retaliation: U.S. prosecutors

Fri Feb 19, 2016 1:41pm EST
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By Nate Raymond

NEW YORK (Reuters) - U.S. prosecutors said several witnesses in the criminal securities fraud case against notorious former pharmaceutical executive Martin Shkreli are concerned about retaliation and have received threats from him in the past.

Prosecutors cited the concern about witness intimidation in a brief filed late on Thursday in federal court in Brooklyn, New York, as they sought to delay a related U.S. Securities and Exchange Commission lawsuit.

The brief opposed a bid by Shkreli, 32, to take depositions and to obtain evidence in the SEC's civil case, saying doing so would result in the early disclosure of information not normally available to defendants until late stages in criminal cases.

Among the reasons for putting the SEC case on hold, prosecutors said, was the "well-founded concern of witness intimidation based on defendant Shkreli's past behavior."

Shkreli's lawyer, Benjamin Brafman, called those arguments "preposterous."

"While his keen 'intellect' can at times be intimidating to mere mortals, nothing else about (Shkreli) is intimidating at all," Brafman said in an email on Friday.

Shkreli, who gained notoriety as the head of Turing Pharmaceuticals when it raised the price of a drug to treat a parasitic infection to $750 from $13.50, was indicted in December and sued at the same time by the SEC.

Both cases allege Shkreli engaged in a Ponzi-like scheme, defrauding investors in his hedge fund MSMB Capital Management and misappropriating $11 million in assets from Retrophin Inc (RTRX.O: Quote), where he was then chief executive, to repay them.   Continued...

Martin Shkreli, former CEO of Turing Pharmaceuticals LLC, prepares to testify before a House Oversight and Government Reform hearing on "Developments in the Prescription Drug Market Oversight" on Capitol Hill in Washington February 4, 2016. REUTERS/Joshua Roberts