Prosecutors Lay Out Securities Case Against Shkreli Attorney

BROOKLYN, N.Y. (CN) – Echoing the points that helped it convict Martin Shkreli of securities fraud, federal prosecutors urged a jury Friday to find Shkreli’s former attorney guilty of furthering the con.

The trial of Evan Greebel, 44, in Brooklyn began this morning, nearly two full years after the lawyer was indicted alongside his famously reviled client.

Shkreli is best known for his unapologetic price-gouging of the HIV drug Daraprim, but it was a scheme to loot millions of dollars from Retrophin, another of his biopharmaceutical companies, that landed the 34-year-old behind bars.

Prosecutors say Greebel co-conspired with Shkreli on the Ponzi-like scheme, looting cash and stock from Retrophin to distract investors he was defrauding through the now-defunct hedge funds MSMB Capital Management and MSMB Healthcare Management.

Greebel was a partner with Katten Muchin Rosenman at the time of the scheme from 2012 to 2014, but Assistant U.S. Attorney David Kessler introduced him to the jury Friday as Shkreli’s “right hand man.”

Kessler said Greebel “had the legal skills to make the fraud look legitimate,” and that Shkreli paid the lawyer handsomely for it.

During the years he was advising Shkreli while Retrophin’s assets were pillaged and traded illegally, Greebel’s income tripled from $300,000 a year to more than $900,000 per year.

Just as prosecutors did in Shkreli’s trial, Kessler walked the jury through the settlement and consulting agreements that were used to pay off MSMB investors.

They were a sham, Kessler said: “fancy legal documents, full of legal terms” to hide the money  that was being stolen.

Kessler emphasized repeatedly in his 20-minute statement told that Greebel betrayed the trust of the Retrophin Board of Directors.

The defense’s opening remarks, given by Reed Brodsky with the firm Gibson, Dunn & Crutcher, meanwhile lasted more than an hour and half.

Markedly more animated than his opposing counsel, Brodsky spoke to the jury as a slideshow punctuated his remarks with bold, black-and-white summaries. “NOT GUILTY,” said one slide. “SHKRELI LIED,” read another.

Brodsky gestured with his hands expressively for most of arguments and used a green laser pointer on a chart to attack claims by prosecutors that Greebel participate in fraudulent backdating of documents and drafted phony settlement and consulting agreements.

Just like the other “sophisticated wealthy” Retrophin investors, Brodsky said, Greebel was “duped” by Shkreli.

Insisting that the men had no prior relationship, the attorney cast Greebel’s indictment as part of a “rush to judgment” in the chaos of the case against Shkreli,

Several of Brodsky’s points seemed ripped from the playbook of Shkreli’s defense attorney, Benjamin Brafman. “No investors were defrauded,” Brodsky said.

He likened the government’s case against Greebel to a “shoulda, coulda, woulda” argument, with “wall after wall after wall of evidence of innocence.”

Brodsky claimed that government prosecutors had conflated Shkreli and Greebel’s conduct several times during their opening argument. “Evan is as different from Martin Shkreli as anybody could be,” the attorney insisted.

Greebel’s defense team also includes fellow Gibson, Dunn & Crutcher attorney Randy Mastro, former deputy New York mayor under Rudy Giuliani.

The jury box, seating eight jurors and four alternates, appeared to include just three men. Judge Matsumoto advised them that the trial may last up to five weeks.

Shkreli faces up to 20 years in prison when is sentenced in January. Because a federal judge found that Shkreli posed a danger to the community, he has been in the government’s custody for the last month.

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