Martin Shkreli delayed and delayed and delayed for years redeeming an investor's $1.3 million stake in Shkreli's hedge fund, and then cooked up a purported "consulting agreement" from a new drug company to finally pay off that man, the investor testified Wednesday.
The investor, Dallas-based Darren Blanton, served as an advisor to the transition of President Donald Trump earlier this year.
On Wednesday, Blanton served as the fourth witness for prosecutors trying to convict Shkreli in Brooklyn, New York, federal court of defrauding investors in two hedge funds he ran, and of then looting Retrophin, the company he founded, to repay those investors.
Blanton, 52, was a catalyst for Retrophin's creation.
Shkreli set out on founding that company after hearing from Blanton about a boy, Joshua Frase, who had a rare muscular condition known as myotubular myopathy, which killed him at age 15 in 2010.
Blanton testified that, in addition to trying unsuccessfully for years to get Shkreli to grant him a promised 20 percent "founder's share" in Retrophin, Shkreli never fulfilled his promise to give either the Joshua Frase Foundation or Joshua's dad Paul each a 3.3 percent stake in Retrophin.
Prosecutors claim Blanton was one of several people to be granted sham consulting agreements from Retrophin to funnel them money and stock after they were defrauded at Shkreli's hedge funds.
"I was worried Martin might be lying to me and not credible," Blanton testified about one point in time during his long, extensive efforts to get Shkreli to redeem money he had put in Shkreli's MSMB Capital hedge fund.
He also testified that when Shkreli was in the process of creating Retrophin, and when some questions were raised about MSMB Capital's performance, Blanton's firm Colt Ventures contacted both the auditor and administrator which MSMB claimed were associated with that hedge fund.