Feds Arrest Martin Shkreli On Fraud Charges

Dec 17, 2015
Originally published on December 17, 2015 12:32 pm
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Transcript

DAVID GREENE, HOST:

A young man who caused a huge controversy by trying to jack up the price of a life-saving drug is back in the news. Martin Shkreli was arrested this morning and will reportedly be charged with securities and wire fraud. The charges stem from his time as CEO of a biotechnology company called Retrophin. An outside counsel to the company has also been charged. And let's talk about this with NPR's Jim Zarroli, who's on the line. And Jim, if you could, just start out with who Martin Shkreli is and how he got here.

JIM ZARROLI, BYLINE: Martin Shkreli is the man people love to hate. He was a former hedge fund manager who heads a company called Turing Pharmaceuticals. In September, it was revealed that Turing had bought the rights to a drug called Daraprim. Daraprim is used to treat parasitic infections, used a lot of - by a lot of AIDS patients also, less often by malaria patients. Turing bought the drug and raised the price from $13.50 cents a dose to $750.

GREENE: A stunning - a stunning a number that really caught a lot of attention.

ZARROLI: Stunning number, and they were not the first company to do this. But when it came out, there was just an avalanche of outrage. Hillary Clinton and Bernie Sanders talked about him on the campaign trail. Now, at first, Shkreli defended the company. He said, we need the money to raise - you know, so we can do research. Then he gave in and said he would lower the price by negotiating volume discounts to hospitals. It's not clear whether he's done that yet.

GREENE: OK, so the FBI says he's arrested this morning at his home in Manhattan. Why arrested now?

ZARROLI: Well, this actually has nothing to do with Turing and the controversy in September. This grows out of his time as CEO of a biotech company called Retrophin. And he had a pretty checkered career there. He was fired from the board because of what the company said was serious misconduct. The company later sued him. It accused him of using the company to enrich himself. It said he had a separate hedge fund. And he had defrauded the investors there and then tried to repay them by giving them consulting arrangements with Retrophin. He was also accused of harassing an ex-employee and his wife. So these allegations appear to have grown out of that case. As for Retrophin, it has said it is cooperating with the government in every way it can.

GREENE: OK, so Retrophin says it's cooperating. Have we heard from Martin Shkreli responding to these charges?

ZARROLI: Well, he hasn't so far. As for the arrest this morning, he hasn't had anything to say. In the past, he has denied the allegations by Retrophin in various ways. He does give interviews. He - but he issued a statement on social media saying everything the company says is completely false, untrue at best and defamatory at worst. Every transaction I've ever made at Retrophin was done with outside counsels' blessings. I have the bills to prove it. The problem here is that the outside counsel that Retrophin is - was also arrested this morning and is being charged alongside him. His name is Evan Greebel, arrested in Manhattan. But you know, Shkreli is really, at this point, just the face of corporate greed and arrogance. I mean, it's really pretty incredible. He's this - you know, this boyish 32-year-old from an immigrant family in New York. He grew up very poor. He is very smart, very sure of himself. And you know, at the age of 32, he's made a lot of money, and he's spent a lot of money. It was recently revealed that he was the auction winner of the only copy of "Once Upon A Time In Shaolin" the album from the hip-hop collective the Wu-Tang Clan. And he is said to have paid $2 million.

GREENE: Wow, he's certainly a man who knows how to make news, it sounds like.

ZARROLI: Yes, he does and not in a good way.

GREENE: All right. That is NPR's Jim Zarroli speaking to us this morning about the arrest of Martin Shkreli. Transcript provided by NPR, Copyright NPR.