Health and Science

Shkreli must turn over Wu Tang album, prosecutors tell court

Key Points
  • Federal prosecutors are asking for forfeiture of $7.36 million they say Martin Shkreli obtained as a result of his committing securities fraud.
  • Prosecutors asked for Shkreli to turn over substitute assets, including his single-copy Wu Tang Clan album.
  • Shkreli is scheduled to be sentenced Jan. 16.
Former pharmaceutical executive Martin Shkreli departs the U.S. District Court for the Eastern District of New York, August 3, 2017 in the Brooklyn borough of New York City.
Getty Images

Federal prosecutors want Martin Shkreli to give up his Wu Tang Clan album.

In asking for forfeiture of $7.36 million they say Shkreli obtained as a result of committing securities fraud, the prosecutors said the jailed former pharma CEO should be forced to turn over substitute assets, including the single-copy album for which Shkreli paid $2 million.

They also asked for $5 million in cash that was held in an E*Trade account as security for Shkreli's bond; Shkreli's shares of Turing Pharmaceuticals, the drug company that rocketed him to infamy for raising the price of the medicine Daraprim; the Lil Wayne album "Tha Carter V;" an Enigma machine and a Picasso painting.

The $7.36 million, the prosecutors wrote in a letter to Judge Kiyo Matsumoto Thursday, "represents a conservative computation of the proceeds Shkreli personally obtained as a result of his three different securities fraud crimes of conviction."

Shkreli was convicted in August on two counts of securities fraud and one count of conspiracy to commit securities fraud, in connection with two hedge funds and a biotech company he ran. He was found not guilty on five other counts.

Shkreli's attorney, Ben Brafman, said he'll "vigorously oppose the government motion."

"Our position is clear," Brafman said in a statement Friday. "None of the investors lost any money and Martin did not personally benefit from any of the counts of conviction. Accordingly, forfeiture of any assets is not an appropriate remedy."

Prosecutors say Shkreli accessed millions of dollars during the periods of time he committed securities fraud, and should be forced to "forfeit those funds he would not have had but for his criminal offenses."

They tallied $3 million for schemes at the hedge fund MSMB Capital, $3.4 million at MSMB Healthcare, and $960,000 for his conviction on conspiracy to commit securities fraud at the biotech company Retrophin.

"These funds were, in essence, the life blood that fueled the fraud scheme," the prosecutors wrote.

Shkreli's defense argued he ultimately paid back his investors more than they put into his funds.

After he was convicted, Shkreli put the Wu Tang Clan album — called "Once Upon a Time in Shaolin" — up for auction on eBay. It had amassed bids of more than $1 million before Shkreli was remanded into custody in September for offering to pay his Facebook followers to grab Hillary Clinton's hair. Shkreli later apologized and said he was joking.

He's scheduled to be sentenced Jan. 16.

WATCH: FBI tweets in 2015 that it did not seize Shkreli's Wu Tang album

Shkreli: The Bill Murray Wu-Tang clause
Shkreli: The Bill Murray Wu-Tang clause