Summary: The former attorney for Turing Pharmaceutical CEO Martin Shkreli has been convicted of conspiring in the scheme to defraud investors.
An ex-attorney for Martin Shkreli, the CEO of Turing Pharmaceutical, who was arrested as a co-defendant with Shrekli, was convicted of securities fraud by a New York City jury. Evan Greebel may be headed to prison for his role in conspiring with the hedge-fund-manager-turned-biotech-executive.
Greebel, 42, advised companies like Retrophin Inc. while helping in the scheme that stole $11 million so that Shkreli could pay back investors when he lost their money from risky trades. Retrophin fired Shkreli in September 2014. He then went on to join Turing Pharmaceuticals, where he dramatically increased prices on a life-saving drug for AIDS and cancer patients by 5,000 percent. The public let their outrage of his action be known, putting him into the limelight. A short four months later, Shkreli was arrested and charged with fraud.
The scheme involved creating a fake settlement and consulting contracts so investors could be paid back. Greebel and Shkreli used assets from Retrophin to help pull off the share-control scheme. The trial for Greebel was a virtual repeat of the testimony from Shkreli’s case. The majority of the witnesses, such as consultants, investors, and board members, were repeated from the first trial. Since they were used again, Greebel’s attorneys were able to find information on the witnesses to challenge their credibility. This included an admission from an accountant about his own fraudulent scheme.
Greebel was a corporate lawyer at Katten Muchin Rosenman. He advised Retrophin as outside counsel, although current Retrophin CEO Steve Aselage and former chairman Steve Richardson claim he had more loyalty to Shkreli than Retrophin. Greebel apparently helped Shkreli understand the terms of his employment agreement when Retrophin was in the process of firing him.
Despite the fact that the two were involved together in the scheme, emails show that Shkreli would call Greebel and his colleagues “lazy and stupid and paid too much.” However, Greebel showed regard to Shkreli, agreeing to devise the plan to commit fraud.
Witnesses for the defense included lawyers Greebel had worked with at Katten and Kaye Scholer LLP. They testified that Greebel was a talented attorney and Shkreli was a difficult client. They believed the consulting agreements were real.
Greebel was convicted of conspiracy to commit wire fraud and conspiracy to commit securities fraud. He had been indicted on seven charges. U.S. Attorney for the Eastern District of New York Robert Capers said, “As alleged, Martin Shkreli engaged in multiple schemes to ensnare investors through a web of lies and deceit. His plots were matched only by efforts to conceal the fraud, which led him to operate his companies, including a publicly traded company, as a Ponzi scheme, where he used the assets of the new entity to pay off debts from the old entity. When regulators and auditors questioned Shkreli’s decisions, he joined forces with Evan Greebel, who used his law license and training to conceal and further the scheme.”
Shkreli was convicted of defrauding investors in August. He is being held in prison until his sentencing. He was tried separately from Shkreli.
What kind of sentence do you think Greebel will get? Share your thoughts with us in the comments below.
To learn more about Shkreli and the case against him, read these articles:
- Pharma Bro Martin Shkreli and Lawyer Evan Greebel Post Bail
- Lawyers Have Trouble Finding Impartial Jurors in Martin Shrekli Trial
- Artist Sues Martin Shkreli over Wu-Tang Clan Album
Photo: newyorklawjournal.com