Martin Shkreli, the pharmaceutical head who was indicted for securities fraud last month, will be allowed to travel to Washington D.C. to testify before Congress about drug pricing, Eastern District Judge Kiyo Matsumoto ruled on Monday.
Although the ruling means Shkreli can’t use his bail conditions to escape attending a congressional hearing, he has said he will assert his Fifth Amendment right against self-incrimination if forced to testify.
Shkreli stirred public outrage last year when Turing Pharmaceuticals, where he was CEO until last month, increased the price of Daraprim, a drug used to treat a life-threatening infection, from $13.50 to $750 overnight.
The criminal charges against Shkreli, announced Dec. 17, involve his actions at a separate pharmaceutical company, Retrophin, where he was CEO until September 2014. The Eastern District U.S. Attorney’s office alleges he defrauded hedge fund investors and then misappropriated more than $11 million in assets from Retrophin to pay back the investors.
A Kaye Scholer partner, Evan Greebel, was indicted alongside Shkreli (NYLJ, Dec. 18, 2015).
Just weeks after prosecutors unsealed the indictment, Shkreli received a subpoena on Jan. 12 from the U.S. House of Representatives’ Committee on Oversight and Government Reform demanding he testify at a hearing on the factors that contribute to the way drugs are priced. The hearing, set for Tuesday, was rescheduled to Feb. 4 due to the weekend snow storm.
Shkreli’s attorneys at Arnold & Porter informed the committee that Shkreli would plead the Fifth, according to court documents. They also told the committee that Shkreli is forbidden to leave New York’s Eastern and Southern Districts under his bail conditions.
Specifically, in a Jan. 22 letter to the congressional committee, Arnold & Porter said Shkreli is entitled to assert the Fifth about Daraprim questions even though they do not form the basis of the indictment.
In the letter, Baruch Weiss, an Arnold & Porter partner representing Shkreli, said the Federal Trade Commission is investigating possible civil antitrust violations about Daraprim drug prices and Turing Pharmaceuticals when Shkreli was its CEO. In addition, Weiss said, the New York Attorney General’s office is investigating allegations of anti-competitive behavior related to Daraprim drug prices.
“If Mr. Shkreli made any statements about Daraprim, or increases in prices for Daraprim, those statements therefore could be used against him,” the attorney said.
Weiss also told the congressional committee that Eastern District prosecutors have said that the government’s criminal investigation is continuing. “We do not know if the government’s ongoing investigation will cover issues to be disclosed at the upcoming committee hearing,” he wrote.
Weiss argued that Shkreli should not be forced to come to Washington only to assert the Fifth Amendment privilege in person.
According to the firm’s letter, the committee has indicated that Congress might seek to immunize Shkreli. If and when the committee decides to immunize him, Weiss said, “he will gladly cooperate in any way, answer any questions, and produce any documents.”
But, in a response on the same day, the congressional committee threatened to pursue criminal contempt charges if Shkreli failed to appear. “The committee rejects the notion that Mr. Shkreli is unable to comply with the subpoena,” Rep. Jason Chaffetz, (R-Utah), committee chairman, wrote to Weiss.
Soon after, Shkreli’s lawyers wrote to Matsumoto to seek guidance and suggested they could move to block the subpoena.
But the judge eliminated any possibility of Shkreli citing his bail to escape the hearing. In a Monday ruling, Matsumoto said Shkreli is permitted to testify at the Feb. 4 hearing and must submit a copy of his itinerary in advance.
The Eastern District U.S. Attorney’s office told the judge it did not object to Shkreli traveling to Washington to comply.
Arnold & Porter continues to act on Shkreli’s behalf, even though the law firm informed the judge on Jan. 18 that Shkreli is in the process of finding new counsel. As of Monday, no other attorneys have entered the case on Shkreli’s behalf.
Shkreli continues to speak his mind on Twitter. On Monday, he tweeted, “there is nothing id like more than to tear Congress a new one. they know I can’t say anything … really unconstitutional.”
When reached Monday, Weiss declined to comment about the judge’s ruling and Shkreli’s plans.
Meanwhile, Shkreli’s co-defendant, Greebel, on Monday requested a modification of his travel restrictions that would allow him to go to Connecticut and, with advanced notice to the government, travel throughout the continental United States.
Kaye Scholer spokeswoman Andrea Orzehoski said that Greebel was still a partner at Kaye Scholer as of Monday and the firm is conducting an internal investigation to determine its next steps.