CEO who raised price of life-saving drug 5,000% arrested on securities fraud
The drug company CEO who sparked worldwide outrage for raising the price of a life-saving pill by 5,000 per cent has been arrested on securities fraud.
Pharmaceutical entrepreneur Martin Shkreli, 32, was arrested by the FBI as part of a securities fraud investigation early Thursday morning at his New York City home.
The allegations date back to a former hedge fund and drug company Retrophin Inc. Shkreli founded in 2011.
WATCH: Robert L. Capers, the District Attorney for New York, announces the charges against pharmaceutical entrepreneur Martin Shkreli, 32, who was arrested by the FBI as part of a securities fraud investigation early Thursday morning.
According to Bloomberg News, prosecutors charged Shkreli for allegedly taking stock from his former biotech company and using the funds to pay off debts “from unrelated business dealings.”
Shkreli is accused of making secret payoffs and had set up fake consulting arrangements while at MSMB Capital Management, Bloomberg reported.
At a press conference Thursday afternoon, the District Attorney for New York said that in the indictment, Shkreli was behind an alleged “Ponzi-like scheme.”
“He used each subsequent company to pay off defrauded investors from the prior company,” Robert L. Capers said. “Shkreli used money from MSMB Health Care to pay off debts he incurred from a series of bad trades he made at MSMB Capital.”
Earlier this year, Shkreli sparked international outrage after he raised the cost of Daraprim from $13.50 to $750 per pill.
Daraprim has been available for 62 years. The patent expired decades ago. It’s the preferred treatment for a rare parasitic infection, toxoplasmosis, which mainly threatens people with weak immune systems, such as HIV and organ transplant patients.
The Associated Press reported the charges include conspiracy to commit securities fraud, conspiracy to commit wire fraud and securities fraud.
WATCH: Is increase in the price of HIV drug related to fraud charges against Martin Shkreli?
“These charges in today’s indictment highlight the brazenness and the breadth of Shkreli’s schemes and the outrageous web of lies and deceit,” Capers said.
The news agency added a New York lawyer, Evan Greebel, was also charged with conspiracy to commit wire fraud.
The alleged schemes were committed between September 2009 and September 2014.
–with a file from the Associated Press
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