Infamous pharma exec charged with fraud in hedge fund case

The Associated Press

A pharmaceutical company executive who became infamous for implementing an astronomical increase in the price of a drug was arrested Thursday in New York City on federal charges of securities fraud related to firms he previously led.

Martin Shkreli, 32, allegedly defrauded investors in two hedge funds he founded and in Retrophin, a pharmaceutical firm he previously led.

Evan Greebel, a former outside counsel to Retrophin, was indicted in the case alongside Shkreli.

The case is unrelated to Turing Pharmaceuticals, where Shkreli as chief executive acquired a drug used to treat parasitic infections — including in AIDS patients — and hiked the price from $13.50 per pill to $750.

The action drew international notoriety and harsh criticism from U.S. politicians. Since then, other pharmaceutical companies have announced plans to produce a generic version of the drug, whose patent protection has long expired.

“As alleged, Martin Shkreli engaged in multiple schemes to ensnare investors through a web of lies and deceit,” Robert Capers, U.S. attorney for the Eastern District of New York, said in a statement.

“His plots were matched only by efforts to conceal the fraud, which led him to operate his companies, including a publicly traded company, as a Ponzi scheme, where he used the assets of the new entity to pay off debts from the old entity.”

Capers alleged that Greebel “used his law license and training to conceal and further the scheme.”