Indicted corporate lawyer Evan Greebel said it “shocks the conscience” that prosecutors haven’t dropped a wire fraud conspiracy charge against him in light of the acquittal of his co-defendant, Martin Shkreli, on the same count.
“We are shocked and dismayed that the U.S. Attorney’s Office” has not dropped the charge against Greebel, following the acquittal of the charge against Shkreli, who was allegedly “the mastermind and orchestrator of this alleged conspiracy,” said Greebel’s defense lawyers at Gibson, Dunn & Crutcher.
The Gibson Dunn team presented a flurry of arguments Aug. 18 in preparation for Greebel’s trial in mid-October, including a bid to dismiss the wire fraud conspiracy count and to preclude certain law firm evidence, such as Greebel’s salary of at least $300,000 at Katten Muchin Rosenman.
Prosecutors have claimed Greebel and Shkreli conspired to defraud biopharmaceutical company Retrophin Inc., where Shkreli was CEO until 2014.
Greebel was Retrophin’s outside counsel and a partner at Katten at the time of the alleged fraud. He joined Kaye Scholer in the summer of 2015 but resigned in early 2016, after the indictment was filed.
Greebel and Shkreli were charged together in two counts: conspiracy to commit wire fraud related to Retrophin and conspiracy to commit securities fraud related to Retrophin stock.
Their cases were severed earlier this year, with Greebel’s trial following Shkreli’s.
While Shkreli was convicted Aug. 4 of three counts, a jury acquitted him of five counts, including the wire fraud conspiracy charge also facing Greebel.
Gibson Dunn argues that now, because “there is absolutely no evidence that Mr. Greebel conspired with anyone else to commit this alleged crime,” that count against him must be dismissed.
Greebel’s attorneys include Reed Brodsky, Winston Chan, Randy Mastro and Lisa Rubin.
The looming trial against Greebel on a charge on which Shkreli was acquitted is “a Kafkaesque scenario,” they said, adding the case is “frightening for every corporate lawyer in America simply doing their jobs representing clients.”
The defense team also criticized the U.S. Attorney’s Office for the Eastern District of New York for how it handled the lead-up to the case. Defense lawyers noted that the U.S. Attorney’s manual mandates that a federal prosecutor’s office must obtain prior approval before the Justice Department in Washington, D.C., before even serving a subpoena for documents or testimony on an attorney.
In this case, Gibson Dunn said, the Eastern District office, in its pursuit of Shkreli, chose not to go to Washington before indicting Greebel. “The government never even attempted to speak with Mr. Greebel, or a single person at Katten” before arresting him, the lawyers asserted. “That is simply unacceptable.”
In court papers seeking to preclude evidence at trial, Gibson Dunn wants to block jurors from hearing of Greebel’s partner compensation at Katten of at least $300,000. They said evidence shows his compensation was not based on his billable work for Retrophin and Shkreli’s hedge fund entities, since his pay actually decreased for the years he did most work for these companies.
Similarly, defense lawyers argued Katten’s legal fees should not be admitted at trial because the information doesn’t reflect how much Katten actually received. They also said the fees reflect work from about 90 people, including attorneys and staff.
“While Katten actually billed approximately $9 million” for Retrophin and Shkreli’s hedge fund entities, Greebel’s lawyers said, “the firm only collected somewhere between $5 and $6 million in fees.”
In their own arguments, Eastern District prosecutors contend some of the defense’s proposed expert testimony should be blocked at trial.
Greebel’s defense lawyers disclosed earlier this month that they may call at trial several expert witnesses who could discuss legal ethics, linguistics and law firm business issues. His proposed expert witnesses include Stephen Gillers, a legal ethics professor at New York University School of Law; Stephen Ferruolo, dean of the University of San Diego School of Law; Bryan Garner, editor of Black’s Law Dictionary; and Ronald Minkoff, a partner at Frankfurt Kurnit Klein & Selz.
But federal prosecutors, including Alixandra Smith, David Pitluck and David Kessler, said the proposed testimony of many of the experts is inappropriate and irrelevant.
“No attorney commits malpractice by refusing to help his client to commit a crime, and suggesting anything else to the jury would create improper and unwarranted uncertainty about the applicable law,” they said.