Feds Scoff at Shkreli’s Claim of Money Problems

BROOKLYN, N.Y. (CN) – Undermining Martin Shkreli’s recent claims of money problems, prosecutors regaled a federal judge Monday with reports of the so-called pharma bro’s extravagant spending.

Though his defense says much of Shkreli’s money is nonliquid, Assistant U.S. Attorney Jacquelyn Kasulis questioned how it was then that Shkreli offered a $100,000 bounty recently for information on the murder of Seth Rich, the former staffer for the Democratic National Convention whose death is the focus of long-running conspiracy theory about the Clintons.

Kasulis noted that Shkreli also has spent the last several months in a bizarre game of cat-and-mouse with the rapper Lil Wayne over a years-delayed and still-unreleased “Tha Carter V.”

In yet another public demonstration of spending, Kasulis brought up Shkreli’s recent habit of buying internet domain names associated with journalists who are critical of him. Shkreli also famously paid a Princeton University student $40,000 earlier this year for solving a geometric theorem proof.

Defense attorneys Benjamin Brafman opened the door to his client’s holdings this morning while Shkreli awaits trial on charges that his management of the biotechnology firm Retrophin amounted to a “Ponzi-like” $11 million securities fraud.

Shkreli is out on $5 million bail, but Brafman wants the court to release $3 million of that amount for mounting legal and tax bills.

Calling his 34-year-old “unhinged,” Brafman called it “cruel and unusual” punishment to have the defense team continue working their “collective heart off” on making hard copies for discovery without being paid.

Brafman also used the words “inappropriate” and “traveling to the beat of his [own] unique drummer” to describe Shkreli, whose six-week fraud trial is set begin with jury selection on June 26.

Saying that his boutique firm has spent hundreds of thousands of dollars on “round-the-clock” trial preparation, Brafman some of his New Jersey-based legal team have needed hotel stays. They’ve spent a “fortune out of pocket,” the attorney added/

Shkreli also owes more than $300,000 to the law firm Fox Rothschild, for its handling of his civil-court entanglements.

In addition to outstanding legal fees, Brafman said Shkreli would use part of his bail money to make “good-faith payments” of $1.25 million to the New York State Tax Department and $1 million to the Internal Revenue Service.

Brafman explained if U.S. District Judge Kiyo Matsumoto modifies Shkreli’s bail, the funds would be released from an E-Trade account to a Fox Rothschild-managed escrow account.

Attributing his client’s wealth to his shares of Turing Pharmaceuticals, valued somewhere in the $30 million to $40 million range, Brafman said a restrictive partnership agreement means those shares are not liquid assets.

As for the infamous single copy of a Wu Tang Clan record that Shkreli purchased in 2015 for $2 million, Brafman referenced that asset today as being basically “worthless.”

Announcing plans to call 57 defense witnesses for Shkreli’s upcoming trial, Brafman would not confirm whether Shkreli himself will testify.

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