'Pharma Bro' Martin Shkreli May Face Additional Fraud Charges

The former pharmaceutical executive faces charges on securities and wire fraud.

ByGILLIAN MOHNEY and AARON KATERSKY
May 03, 2016, 12:00 PM

— -- Former pharmaceutical CEO Martin Shkreli may face additional fraud charges, prosecutors said today in a Brooklyn court. Shkreli initially came under fire for significantly raising the price of a drug called Daraprim that treats a parasitic infection called toxoplasmosis, which most often occurs in those with compromised immune systems due to cancer treatments or HIV infection. He was arrested last December on multiple charges of securities and wire fraud related to a different company he founded.

Shkreli appeared in U.S. District Court in Brooklyn today alongside his attorneys. He sat in the court with his arms folded as prosecutors said they would decide within a month whether or not to issue a superseding indictment, which would lead to additional charges.

Shkreli will be back in court on June 6.

Shkreli's lawyer Ben Brafman told reporters he thought the hearing was a "good day" for his client.

"We do not believe this indictment will...affect Martin Shkreli in a negative fashion and we still believe the charges in this case are very defensible," said Brafman. "We plead not guilty and we intend to proceed to trial."

The former CEO of Turning Pharmaceuticals took to Twitter in recent weeks to thank supporters and proclaim his innocence.

Robert Capers, U.S. attorney for the Eastern District of New York, told reporters in December that Shkreli allegedly defrauded investors in two hedge funds, MSMB Capital and MSMB Healthcare, and also plundered Retrophin, the biopharmaceutical company he ran as its CEO, in an effort to pay back debts related to the now-defunct hedge funds.

Prosecutors allege that Shkreli lost all of the investments in MSMB Capital but continued to provide inflated and false performance updates to its investors.

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