MANHATTAN (CN) – Two-thirds of the way through an 18-month sentence, the lawyer convicted of conspiring with imprisoned pharmaceutical wunderkind Martin Shkreli urged the Second Circuit on Tuesday to order a new trial.
Formerly with the firm Katten Muchin Rosenman, Evan Greebel served as outside counsel for Shkreli’s biotechnology startup Retrophin. Though Shkreli was prosecuted for securities fraud, the 36-year-old became a household name for his stint at Turing Pharmaceuticals, where he jacked up the price of the life-saving HIV drug Daraprim by 5,000%.
Shkreli also controlled a hedge fund, and it was there, prosecutors showed, that he engaged in a Ponzi-like scheme to make investors think their accounts were flush by using profits diverted from Retrophin.
Jurors found that Greebel’s loyalties lay with Shkreli rather than Retrophin, convicting him of wire and securities fraud conspiracy for supporting the scheme.
Representing Greebel before a three-judge appeals panel Tuesday, however, Paul Weiss attorney Kannon Shanmugam argued that the jury instructions were misleading and overbroad, and could have caused lay jurors to misunderstand what constitutes stock market manipulation.
“This prosecution was unprecedented,” Shanmugam said. “The government’s theories of prosecution on both counts were extraordinarily aggressive.”
Contending that the government hinged its case against Greebel on a reporting duty stricter than actual lawyer ethics rules, Shanmugam also argued that Greebel had no duty to report Shkreli’s misconduct to anyone else at Retrophin.
U.S. Circuit Judge Joseph Bianco pushed back on this, noting that, if Shkreli was a co-conspirator, then keeping the news between the two of them did not constitute adequate disclosure.
A Donald Trump appointee, Bianco suggested that Greebel should have taken the information elsewhere if he believed Shkreli was involved in some kind of fraud.
Assistant U.S. Attorney Alixandra Smith agreed. “There is no question that Greebel did not keep his client — the company — reasonably informed,” she said, referring to Shkreli’s frauds.
Shanmugam meanwhile pointed to the settlement agreements Greebel drew up in response to the trouble, calling them an appropriate response to the potential legal liability Retrophin faced.
Assistant U.S. Attorney Alixandra Smith pushed the appeals court to affirm.
“He is, in both fraud schemes, front and center in the fraud itself,” Smith said of Greebel.
Shanmugam confirmed after arguments that Greebel, 46, was present at the hearing, as was Citrin Greebel, the defendant’s wife.
Rounding out the panel today were U.S. Circuit Judge Rosemary Pooler, a Bill Clinton appointee, and Judge Jennifer Choe-Groves, by designation from the U.S. Court of International Trade.
Greebel reported to prison on Oct. 17, 2018, and is expected to get out on Jan. 25. He’s been ordered to shell out over $10 million in restitution payments.
“I will regret every day of my life the day I met Martin Shkreli,” Greebel told U.S. District Judge Kiyo Matsumoto court at his August 2018 sentencing.
Though allegations of juror misconduct were raised after Greebel’s 11-week trial, they did not come up in oral arguments Tuesday. The court reserved judgment.