MANHATTAN — Martin Shkreli — the much-reviled pharmaceutical exec who hiked the price of an anti-AIDS drug and bought a one-of-a-kind Wu-Tang Clan album for $2 million — was arrested Thursday for running an $11 million Ponzi scheme full of "lies, deceit and greed," federal prosecutors charged.
Shkreli, who also just offered to pay rapper Bobby Shmurda's $2 million bail, was hauled from his Murray Hill home wearing a hoodie early Thursday morning, according to Reuters.
The FBI said the Wu-Tang had not been seized as part of the investigation.
"We are not aware of where he got the funds for the Wu-Tang Clan album," said Robert Capers, acting-U.S. Attorney in Brooklyn.
#Breaking no seizure warrant at the arrest of Martin Shkreli today, which means we didn't seize the Wu-Tang Clan album.
— FBI New York (@NewYorkFBI) December 17, 2015Shkreli, 32, as far back as 2009, used money from a pharmaceutical company where he worked as CEO to pay off debts after a hedge fund he managed lost millions of dollars, according to Brooklyn federal prosecutors.
"Shkreli engaged in multiple schemes to ensnare investors through a web of lies and deceit," Capers said.
"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," the prosecutor added.
The charges stem from Shkreli's time heading up hedge funds MSMB Capital and MSMB Healthcare as well as Retrophin, a pharmaceutical company.
Shkreli's attorney, Evan Greebel, 42, was also arrested for the schemes.
"Shkreli lied to his biggest investor telling him that MSMB Capital had $35 million in assets under management, when in fact MSMB Capital had less than $700 in its bank and brokerage accounts," prosecutors said.
In one failed investment, Shkreli lost more than $7 million in February 2011 after shorting 32 million shares of Orexigen Therapeutics, according to court papers.
MSMB then lost an additional $1 million that February after making more bad trades.
As a result of the deals, excluding the Orex short, MSMB's accounts went from $1.12 million on Jan. 31 to $58,000 by the end of February, prosecutors alleged.
At his arraignment Thursday afternoon, he appeared somber as he consulted with his lawyer. The judge set his bail at $5 million which paid with money and securities from a bank account.
When home on bail, Shkreli took to Twitter to thank everybody for their "support."
Glad to be home. Thanks for the support.
— Martin Shkreli (@MartinShkreli) December 18, 2015Shkreli first drew international headlines when he abruptly increased the price of an AIDS medication he bought from $13.50 a tablet to $750 a tablet.
He then drew more ire when he paid $2 million to own the only copy of Wu-Tang's latest album "Once Upon a Time in Shaolin."
Shkreli also said he was trying to bail out Shmurda, who's been behind bars since last December when he was arrested on gun and gang charges.
“Forget whether you think he’s guilty or not, the guy should not be sitting in jail right now,” Shkreli said, according to reports.
“It’s insane. He’s from Brooklyn. I’m from Brooklyn. He deserves a fair trial.”
