Martin Shkreli, Brooklyn Pharma Bro, Could Do 20 Years for Securities Fraud

UPDATE, 4:30 p.m.: Shkreli reportedly plead “not guilty” in court Thursday and was released on a $5 million bond. He is not allowed to leave the New York City area. Meanwhile, an important announcement from the FBI.

Oh, also: Watch the moment Martin Shkreli receives a call from a “special agent” during his nightly YouTube live stream.

DOWNTOWN BROOKLYN, NY — Turing Pharmaceuticals CEO and founder Martin Shkreli, a 32-year-old biotech entrepreneur and investor from Sheepshead Bay, Brooklyn, whose self-serving business decisions and flippant personal conduct have made him 2015’s poster boy for greed in the pharmaceutical industry, has been arrested on federal charges of securities fraud, securities fraud conspiracy and wire fraud conspiracy.

If convicted, Shkreli faces a maximum sentence of 20 years behind bars, according to the U.S. Attorney’s Office in Brooklyn.

“As alleged, Martin Shkreli engaged in multiple schemes to ensnare investors through a web of lies and deceit,” U.S. Attorney Robert L. Capers said in a statement issued Thursday. “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.”

Shkreli was reportedly taken into custody by FBI agents at his residence in the Murray Hill Tower Apartments in Midtown Manhattan early Tuesday morning. (Courtesy of Gawker, Here’s Your Martin Shkreli Perp Walk Schadenfreude Gallery.)

The full indictment against Shkreli and his alleged conspirator, Evan Greebel, is included at the bottom of the page.

A prolific tweeter and YouTuber, Shkreli sent out his last tweet around 10 p.m. on Wednesday night, in response to a higher-up at Microsoft telling him to ”stay humble.” Shkreli replied: ”always fam.” He also recorded the following live stream of himself in his apartment, as he does on many nights.

The young Brooklyn mogul shot to notoriety in September for raising the price of Daraprim, a critical HIV drug purchased by his company, by more than 5,000 percent.

He has since become something of a love-to-hate-him pop-culture figure in the vein of Donald Trump, thanks in part to wild comments he made surrounding his $2 million purchase of Wu-Tang’s one-of-a-kind record, Once Upon a Time in Shaolin, and another $2 million offer to bail Brooklyn rapper Bobby Shmurda out of jail.

The new charges against him focus on past business practices. Bloomberg Business explains:

Prosecutors charged him with illegally taking stock from Retrophin Inc., a biotechnology firm he started in 2011, and using it pay off debts from unrelated business dealings. He was later ousted from the company, where he’d been chief executive officer, and sued by its board.

In the case that closely tracks that suit, federal prosecutors accused Shkreli of engaging in a complicated shell game after his defunct hedge fund, MSMB Capital Management, lost millions. He is alleged to have made secret payoffs and set up sham consulting arrangements.

“The charges announced today describe a securities fraud trifecta of lies, deceit, and greed” that cost Retrophin and its investors more than $11 million, Diego Rodriguez, assistant director-in-charge of the FBI, said in a statement.

“While the charges announced today are significant, they are but one example of what’s left to come as the FBI continues this investigation,” Rodriguez said.

Shkreli previously denied wrongdoing in an interview with Bloomberg, saying he had a “difference of opinion” with his board at Retrophin.

Below, the indictment in full. (Make sure to at least read through the bottom of Page 5, at which point Shkreli allegedly tells one of his investors that his hedge fund has $35 million in assets — when in fact, according to the feds, it has $700.)