Pharma bro Martin Shkreli will be tried separately from his former business lawyer on securities fraud charges, a federal judge ruled Wednesday.
Brooklyn U.S. District Court Judge Kiyo Matsumoto said that Shkreli's constitutional right to a fair trial would be at "serious risk" if he was tried side by side with co-defendant Evan Greebel, since Greebel's criminal defense attorney had threatened to act as "a second prosecutor" against Shkreli.
Shkreli, 34, will go on trial first, beginning June 26.
Greebel will be tried at a later date to be determined.
Matsumoto's decision came less than two weeks after a hearing where lawyers for both Shkreli and Greebel requested their cases be tried separately.
At that hearing, Greebel's lawyer Reed Brodsky warned Matsumoto that in addition to proclaiming Greebel's innocence, he would attack Shkreli as "a liar and a deceiver" who was guilty not only of the charged conduct, but also of other alleged crimes.
"We will be duty-bound to destroy Mr. Shkreli's credibility," Brodsky said at the time. "We are going to be an echo chamber with the government in terms of Mr. Shkreli's lies."
In turn, Shkreli's lawyer, Benjamin Brafman, has indicated that he will use a so-called reliance on counsel defense, which would effectively argue that Shkreli's alleged conduct was done in the belief that it was legal because his attorney, Greebel, had said so.
Prosecutors accuse Shkreli, with Greebel's assistance, of looting a pharmaceuticals firm he had founded, Retrophin, out of millions of dollars to pay off investors he was accused of defrauding at hedge funds he had operated. Both men have pleaded not guilty to the charges.
Matsumoto, in her ruling Wednesday, said, "Although the court finds that the defendants have not shown that their defenses are mutually antagonistic, or that the risk of spillover prejudice is so great that severance is warranted, the court has serious concerns that under the unique circumstances presented, trying the defendants together would present a serious risk that Shkreli will not receive a constitutionally fair trial."
The judge went on to say that, "A joint trial would place on Shkreli an unfair and heavy burden in defending himself against both the government and Greebel."
"Severance is granted because of the stated intention of Greebel's counsel, in his declaration ... and at oral argument, that Greebel's defense team will act as a second prosecutor against Shkreli, by arguing that Shkreli is guilty and that Greebel is, himself, just another victim of Shkreli's fraud."
Matsumoto noted that Greebel's lawyers had said they planned to introduce evidence, even if prosecutors did not, "that Shkreli lied to Greebel and other attorneys and investors."
Shkreli's lawyers, in a prepared statement issued after the severance motion was granted Wednesday, said, "We are very pleased by the court's decision."
"While severance is very rarely granted, we believe that Judge Matsumoto did exactly what the law required in this very unique prosecution, where Mr. Shkreli was to be tried together with the lawyer whose advice he relied on during the period charged in the indictment," Shkreli's lawyers said. "A severance is the only way Martin Shkreli could receive a fair trial."
Greebel's lawyer Brodsky declined to comment.
The U.S. attorney's office for the Eastern District of New York, which is prosecuting the cases, had no comment.
The accusations in the pending criminal case are unrelated to the controversy that first brought Shkreli national notoriety: his having hiked the price of an antiparasite drug by more than 5,000 percent after acquiring it for his other company, Turing Pharmaceuticals.