U.S. Department of Justice United States Attorney Eastern District Of

Case 1:15-cr-00637-KAM Document 261 Filed 07/03/17 Page 1 of 12 PageID #: 3822 U.S. Department of Justice

United States Attorney Eastern District of New York

JMK:GKS/AES 271 Cadman Plaza East F. #2014R00501 Brooklyn, New York 11201

July 3, 2017

By Hand and ECF

Hon. Kiyo A. Matsumoto United States District Judge Eastern District of New York 225 Cadman Plaza East Brooklyn, NY 11201

Re: United States v. Martin Shkreli Criminal Docket No. 15-637 (KAM)

Dear Judge Matsumoto:

The government respectfully moves this Court for an order limiting extrajudicial statements by the defendant Martin Shkreli and counsel for all parties during the pendency of this trial. Since the empanelment of the jury, Shkreli has engaged with the press—in apparent contravention of the instructions of his lawyers—in the courthouse itself, directly outside the courthouse and on digital media in a manner that risks tainting the jury. In order to protect the public’s interest in a fair trial in which the jury will reach a verdict based solely on the evidence presented in the courtroom, the defendant should be restrained from further public comment during the pendency of the trial. In addition, or in the alternative, the government seeks semi-sequestration of the jury.

I. BACKGROUND

As this Court is well aware, Shkreli has been an active and deeply divisive media presence for years. Shkreli’s numerous controversial public statements were a concern of the parties even before jury selection. Indeed, Shkreli’s media persona was cited as a key reason why co-defendant Evan Greebel requested severance of his trial from that of Shkreli. In connection with his severance motion, counsel for Greebel argued at length that Shkreli was likely to disrupt any trial by, inter alia, “attacking prosecutors [and] public figures” and “trying to turn this trial into a circus as part of a deliberate strategy to obtain jury nullification rather than have the jury focus on and carefully consider the evidence.” (See Dkt. No. 161). Case 1:15-cr-00637-KAM Document 261 Filed 07/03/17 Page 2 of 12 PageID #: 3823

In response, defense counsel stated vigorously that Shkreli would not create any issues at trial:

MR. BRAFMAN: . . . Mr. Greebel in his papers -- and one thing I want to assure the Court as a sidebar just for a moment since it’s unfortunately in the papers, I represent to Your Honor as an officer of the court whose probably tried 25 cases to verdict in this building, that there will be no disruption of these proceedings by Mr. Shkreli. He’s not going to do anything to undermine the integrity of these proceedings, as Mr. Brodsky warns. And I promise you, this case, if Mr. Shkreli goes to trial alone, will have substantially less disruptions and less difficulties than if we have a joint trial. So I just want to make sure that Your Honor understands that, because I was taken aback by some of their arguments.

(Apr. 7, 2017 Oral Arg’t Tr. at 43:1-12.)

At the time, based on Shkreli’s appropriate behavior in the courtroom during status conferences and other pre-trial hearings, the Court agreed with counsel for Shkreli:

THE COURT: . . . In terms of the fear that Mr. Shkreli will disrupt this trial, I see no reason to think that he would do that. He’s demonstrated nothing but appropriate conduct throughout all of his appearances here. And, you know, he’s entitled to his opinions. I think you as his attorney would be responsible for counseling him about the downside of making certain kinds of statements or engaging in certain types of conduct, but I don’t control his conduct right now outside the courthouse as long as it’s not having an adverse impact on the proceedings before me. But I have no reasonable to think that Mr. Shkreli would do anything that would impact adversely on the proceedings.

MR. BRAFMAN: And he will not . . . .

(Apr. 7, 2017 Oral Arg’t Tr. at 48:10-22.)

During jury selection in this case (which took place from June 26, 2017 to June 28, 2017), the Court engaged in a lengthy and searching voir dire process that involved over 250 potential jurors. Many of the questions the Court asked of potential jurors concerned their views of and potential biases against Shkreli, including any views developed as a result of Shkreli’s public statements on social media and to the press about this case. This process resulted in 18 jurors who are able to serve for a lengthy period of time, who indicated no disqualifying biases against Shkreli, and who agreed not to read any press or

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social media accounts of the trial. At the time that the jury was selected, it appeared that the trial would proceed in an orderly fashion.

Unfortunately, despite the assurances of defense counsel prior to trial—as well as efforts by defense counsel to control Shkreli—once the jury was selected and empaneled, Shkreli embarked on a campaign of disruption by commenting on trial evidence and witnesses to the press and on social media, and by making a spectacle of himself and the trial directly on the courthouse grounds.

During the lunch break on June 30, 2017, the defendant paid a highly- publicized visit to reporters and members of the public in the overflow viewing room, which is located on the same floor of the courthouse in which the trial is taking place.1 Among other things, the defendant repeatedly commented on evidence the jury had heard just the day before and the credibility of testifying witnesses. For example, Shkreli claimed that investor Sarah Hassan was not a “victim” because she eventually made money by selling Retrophin stock. As quoted in the article, Shkreli stated: “How can a victim make $2.7 million? She’s not a victim.” (See Exhibit D; see also Exhibit A (Shkreli “blasted” Sarah Hassan); Exhibit B (Shkreli stated of Sarah Hassan “we should all only be this victimized in life”)). Shkreli added that he personally “made nothing” from MSMB Capital. (See Exhibit D). Shkreli even previewed his response to evidence that is only partially before the jury at this stage of the case. In the words of the CNBC article, “Shkreli also told reporters that he did not prepare tax documents or Retrophin marketing documents that Hassan testified about on Thursday. Other people did that, he said.” (See Exhibit D). The other articles attached to this motion as Exhibits A through C reflect similar comments by Shkreli to the press in the courthouse on June 30, 2017.

Following the end of the court day on June 30, 2017, Shkreli and Mr. Brafman were interviewed on camera by CNBC reporter Meg Tirrell as they exited the door of the courthouse and headed toward Tillary Street. (See CNBC interview of Shkreli and Brafman, attached hereto as Exhibit E). Ms. Tirrell asked, “Mr. Brafman, how did you feel about Martin coming to talk to reporters today in the middle of trial?” (Id.). Before counsel could

1 See, e.g., “’Pharma Bro’ Compares Prosecutors to ‘Junior Varsity’,” available at http://nypost.com/2017/06/30/pharma-bro-compares-prosecutors-to-junior-varsity/ (annexed hereto as Exhibit A); “Martin Shkreli Makes Surprise Visit to Reporters: ‘The World Blames Me for Almost Everything,’” available at https://www.washingtonpost.com/news/business/wp/2017/06/30/do-i-want-to-exonerate- myself-yes-martin-shkreli-makes-surprise-visit-to-reporters/?utm_term=.334a58bbcb7b (annexed hereto as Exhibit B); “Shkreli Slams Feds in Brooklyn as ‘JV’,” available at http://www.nydailynews.com/new-york/martin-shkreli-jaws-reporters-lawyer-peels-article- 1.3291666 (annexed hereto as Exhibit C); “‘Pharma Bro’ Martin Shkreli Blasts Prosecutors as ‘Junior Varsity,’ Says Investor Wasn’t ‘Victim’ and Criticizes Headlines in Lunch Visit to Reporters,” available at http://www.cnbc.com/2017/06/30/shkreli-blasts-prosecutors-as- junior-varsity-to-reporters.html (annexed hereto as Exhibit D).

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respond, Shkreli spoke directly to the reporter and, referring to himself in the third person, said “He’ll do whatever he wants.” (Id.). Ms. Tirrell asked Shkreli, “You can do whatever you want, Martin?” to which Shkreli replied, “Yes.” (Id.). Mr. Brafman then indicated his hope that Shkreli would no longer talk to the press, saying “I would very much appreciate it if he did not talk to the press because sometimes he doesn’t have a filter.” (Id.). Throughout the video, Shkreli is grinning broadly. (See id.).

Shkreli also appears to be active again on Twitter (despite an ongoing ban from the platform) under the handle “@BLMBro” and is commenting on the evidence presented at trial. Near the end of the CNBC video interview described above, a different reporter asks Shkreli if he is @BLMBro; Shkreli did not deny that the handle belongs to him. (See Exhibit E). Moreover, in a YouTube video posted on or about June 25, 2017, Shkreli identified himself as @BLMBro.2 (See YouTube video posted by Martin Shkreli on June 25, 2017, available at https://www.youtube.com/watch?v=B3FDsMtEpbs, attached hereto as Exhibit F, at 6:13-6:16 (“Follow me on Twitter, @BLMBro”)).

Not only did Shkreli claim ownership over @BLMBro in the YouTube video, but there are strong correlations between Shkreli’s recent public actions and Tweets by @BLMBro. For example, on June 27, 2017 (the second day of jury selection), Shkreli announced on his Facebook page that he had bought Internet domains in the names of two reporters who had recently written critical stories about him.3 That same day, @BLMBro declared:

There is thus a strong likelihood that the defendant is back on Twitter under the name @BLMBro.

2 The government notes that @BLMBro has written the following:

Given Shkreli’s public claim of ownership over the @BLMBro handle and active comments on the evidence, there is a strong likelihood that Shkreli is indeed @BLMBro despite this post. 3 “Shkreli Loses Mistrial Bid and Retaliates Against Reporters,” available at https://www.bloomberg.com/news/articles/2017-06-27/shkreli-judge-denies-request-for- mistrial-during-jury-selection.

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The Twitter user @BLMBro has commented on the evidence at trial and issues connected with the trial, both with direct Tweets and by “re-Tweeting” comments that are critical of the witnesses and/or the evidence. The following is a selection of recent posts about the trial from the @BLMBro account, in which the credibility of witnesses and evidence at trial are questioned, and Shkreli suggests that the media’s portrayal of events during jury selection (for which he was not present, and which are accurately reflected in the trial transcript) are untrue:

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(See June 26, 2017 Trial Tr. at 220:18).

Finally, in addition to his comments on the evidence and witnesses, Shkreli also made inappropriate personal attacks on current and former prosecutors in this case. (See Exhibits A-D).

II. DISCUSSION

A. Legal Standard

“Legal trials are not like elections, to be won through the use of the meeting-hall, the radio, and the newspaper.” Bridges v. California, 314 U.S. 252, 271 (1941). As the Supreme Court explained in Gentile v. State Bar of Nevada, 501 U.S. 1030 (1991), “the theory on which our criminal justice system is founded” is that:

The outcome of a criminal trial is to be decided by impartial jurors, who know as little as possible of the case, based on material admitted into evidence before them in a court proceeding. Extrajudicial comments on, or discussion of, evidence which might never be admitted at trial and ex parte statements by counsel giving their version of the facts obviously threaten to undermine this basic tenet.

Id. at 1070.

Gentile is the most recent of several Supreme Court cases that underscore that a fair trial requires ensuring that the case is determined only by the jurors’ evaluation of admissible evidence. In Pennelamp v. Florida, Justice Frankfurter observed that “it is indispensable ... that in a particular controversy pending before a court and awaiting judgment, human beings, however strong, should not be torn from their moorings of impartiality by the undertow of extraneous influence.” 328 U.S. 331, 366 (1946) (Frankfurter, J., concurring). Similarly, in Estes v. Texas, the Supreme Court noted that “[w]e have always held that the atmosphere essential to the preservation of a fair trial-the most fundamental of all freedoms-must be maintained at all costs.” 381 U.S. 532, 540 (1965).

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In the same vein, “[s]ociety has the right to expect that the judicial system will be fair and impartial to all who come before it.” Levine v. United States Dist. Ct., 764 F.2d 590, 596-97 (9th Cir. 1985). In this sense, “[t]he concept of a fair trial applies both to the prosecution and the defense.” United States v. Tijerina, 412 F.2d 661, 666 (10th Cir. 1969) (upholding gag order on attorneys, witnesses, and parties); Chicago Council of Lawyers v. Bauer, 522 F.2d 242, 254 (7th Cir. 1975) (“the Government is entitled to a fair trial”). “The vigilance of trial courts against the prejudicial effects of pretrial publicity also protects the interest of the public and the state in the fair administration of criminal justice.” United States v. Brown, 218 F.3d 415, 424 (5th Cir. 2000) (upholding gag order on attorneys, parties, and witnesses). Accordingly, the Court “must consider the fundamental interest of the public in insuring the integrity of the judicial process” in imposing restrictions for the purpose of preventing prejudicial outside interference with an impartial trial. Levine, 764 F.2d at 596-97.

Courts are obligated to take steps to “protect their processes from prejudicial outside interference.” Sheppard v. Maxwell, 384 U.S. 333, 363 (1966); Chicago Council of Lawyers, 522 F.2d at 254. “Neither prosecutors, counsel for defense, the accused, witnesses, court staff[,] nor enforcement officers coming under the jurisdiction of the court should be permitted to frustrate its function.” Sheppard, 384 U.S. at 363. Once a trial begins, “there is likely to be the most intense news coverage[,] which therefore creates the most need to ensure that inadmissible opinions or statements do not encroach upon the laboratory conditions of the trial.” Chicago Council of Lawyers, 522 F.2d at 255. Statements of trial counsel carry substantial danger, since the public tends to believe counsel have special access to information, making their comments “especially authoritative.” Gentile, 501 U.S. at 1074. Statements of the parties also pose significant risks, as “trial participants, like attorneys, are privy to a wealth of information that, if disclosed to the public, could readily jeopardize the fair trial rights of all parties.” Brown, 218 F.3d at 428 (affirming gag order on attorneys, parties, and witnesses) (internal quotations omitted); Tijerina, 412 F.2d at 666-67 (same); cf. In re Russell, 726 F.2d 1007, 1010 (4th Cir. 1984) (affirming gag order on trial witnesses).

The Supreme Court has held that a court may restrict extrajudicial statements of the parties and their counsel in order to protect the proceedings from prejudicial external influences. Gentile, 501 U.S. at 1075; Seattle Times Co. v. Rhinehart, 467 U.S. 20, 32 n. 18 (1984); Shepherd, 384 U.S. at 361 (stating that a “trial court might well . . . proscribe[] extrajudicial statements by any lawyer, party, witness, or court official, which divulged prejudicial matters”). In imposing such restrictions, the Court must balance the defendant’s right to a fair trial and the public’s interest in the fair administration of justice against the parties’ and the public’s competing interests in free expression and comment. Accordingly, any restrictions on speech protected by the First Amendment must be narrowly tailored, that is, no more extensive than necessary to preserve the parties’ rights to a fair trial. Chicago Council of Lawyers, 522 F.2d at 249; Brown, 218 F.3d at 423.

Although courts have differed regarding precisely where the line must be drawn with respect to such prohibitions, compare Levine, 764 F.2d at 599 (holding that a ban

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on all statements about “the merits” of a case is overbroad); Tijerina, 412 F.2d at 663, 667 (affirming ban on comments concerning “the merits of the case, the evidence, actual or anticipated, the witnesses[,] or rulings of the Court”), the Supreme Court has held that a court may prohibit comments to the press that have a substantial likelihood of materially prejudicing the trial. Gentile, 501 U.S. at 1075; id. at 1082 (O’Connor, J., concurring) (upholding the constitutionality of a state bar rule limiting the extrajudicial comments of lawyers that created a substantial likelihood of materially prejudicing the trial). See United States v. Scarfo, 263 F.3d 80, 92-93 (3d Cir. 2001); cf. Model Rule of Professional Conduct 3.6(a) (adopting Gentile standard); but see United States v. Salameh, 992 F.2d 445, 447 (2d Cir. 1993) (limitation on statements by attorneys must be “narrowly tailored” and the district court must “make a finding that alternatives … would be inadequate to protect” a fair trial).4 This is because such regulations apply to a narrow class of speech, are viewpoint-neutral, apply equally to all participants in a case, and merely postpone speech until after the trial, rather than prohibiting it. Id.

It is important to note that whereas the Court is limited with respect to imposing restrictions on the press, it has more leeway to impose restrictions on the parties. See Gentile, 501 U.S. at 1074-75 (holding that in the case of restraints on the speech of trial participants, rather than the press, a more permissive standard is constitutionally permissible). In order to protect the trial process from outside influences, the Court has the power to prevent the participants from making extrajudicial comments that may prejudice the jury. See Local Criminal Rule 23.1(h) (“[t]he Court, on motion of either party or on its own motion, may issue a special order governing such matters as extrajudicial statements by parties and witnesses likely to interfere with the rights of the accused to a fair trial by an impartial jury . . . and any other matters which the court may deem appropriate for inclusion in such order”).

Finally, in order to satisfy society’s “overriding interest that justice be done in a controversy between the government and individuals” and its expectation of “fair trials designed to end in just judgments,” an order against extrajudicial statements must apply to all parties to a controversy. Tijerina, 412 F.2d at 666. See also Levine, 764 F.2d at 596-97 (upholding gag order on attorneys) (noting that, although the Sixth Amendment is a limitation on the government and does not give the prosecution the right to a fair trial, “the need to restrict publicity is [not] lessened when the publicity is caused by the actions of the defense, rather than the prosecution”); Tijerina, 412 F.2d at 666 (rejecting defendant’s suggestion that “because the [gag] order was entered for their protection, they cannot be charged with a violation,” and upholding gag order on attorneys, witnesses, and parties). The

4 Prior to the Supreme Court’s decision in Gentile, some circuit courts held that, given the First Amendment interests at stake, gag orders may only reach comments that pose a “clear and present danger” or a “substantial and imminent threat” to a fair trial. See Chicago Council of Lawyers, 522 F.2d at 251; see also Levine, 764 F.2d at 595. While the Second Circuit has not addressed this issue since the Supreme Court=s decision in Gentile, the Fifth Circuit has determined that Gentile “foreclosed” application of the stricter test. See Brown, 218 F.3d at 427.

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order proposed by the government, as described below, meets these standards of being narrowly tailored and applying to all parties.

B. A Court Order is Necessary

In the weeks and months leading up to this trial, defense counsel promised this Court that Shkreli would not disrupt these proceedings. The parties and the Court worked hard to find 18 impartial jurors who are warned at least four times a day not to watch news coverage of this trial or discuss the trial with others. This case has generated intense media interest from the start and that interest has peaked in connection with jury selection and opening arguments. The media glare may not abate as reporters continue to cover the trial, with some reporters going so far as to live-Tweet the evidence. Independent of anything said or done by the parties, jurors must conscientiously avoid news about this case.

But now, Shkreli appears determined to ignore the instructions of defense counsel and to wage his own public relations campaign against the witnesses and the government during the trial. With Shkreli trying the case through the press, the risk of jury interference and a mistrial are becoming manifest. He is roaming the halls of the courthouse commenting to reporters on the evidence at trial, his personal views on the credibility of witnesses and his defense strategy—all of which the reporters are, understandably, then discussing amongst themselves and with members of the public, and repeating to attorneys in the case in search of a comment—at the very same time that jurors are also in the halls of the courthouse on their breaks. He continues to give impromptu statements to reporters at the courthouse doors, possibly in full view and earshot of jurors. He is riling up his social media following to publicly criticize witnesses and evidence. If this behavior continues, it is only a matter of time before Shkreli, or a member of the public who is repeating Shkreli’s statements, exposes one or more jurors to precisely the sort of extrajudicial evidence or commentary that our system forbids. Indeed, Shkreli’s actions “clearly foreshadow” that without a gag order, there is a real possibility of this trial becoming a “circus show performed outside the courtroom.” Levine, 764 F.2d at 597.

The circumstances of this case fall well within those of other cases in which district courts have imposed gag orders, and appellate courts have approved them. See Levine, 764 F.2d at 596-97 (upholding gag order); Brown, 218 F.3d at 418 (same). See also United States v. Cutler, 815 F. Supp. 599, 605 (E.D.N.Y. 1993) (denying motion to dismiss contempt charge based upon violation of gag order, in which a defense attorney launched a public relations campaign, making public statements that the prosecutors had a personal vendetta against his client, did not want a fair fight, and had brought trumped-up charges, and further claimed that taped conversations being used by the government were not crimes and were “‘snippets deliberately taken out of context by the prosecutors’” and that “‘[w]hen the whole tapes are played, not just the snippets,’” his client would be vindicated). Id. at 606 (quoting statement).

For example, one court found a substantial likelihood of prejudice where the defendant, a prominent Louisiana political figure, made statements to the media “declar[ing]

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his innocence as well as his belief that he was the victim of a ‘political drive-by shooting’ at the hands of ‘an out-of-control prosecutor.’” Brown, 218 F.3d at 418. The court based its order primarily on its concern that “pretrial publicity, especially in the form of extrajudicial comments by the parties, would taint the unsequestered jury already impaneled in [the first of a trio of related cases], as well as the pool from which the juries in the other two cases would be drawn.” Id. at 429. The court noted that the parties’ “demonstrated . . . desire to manipulate media coverage to gain favorable attention” drove this concern. Id. Here, Shkreli has demonstrated a similar desire to manipulate media coverage by granting interviews within and just outside the courthouse, and to broadcast similar comments via Twitter.

Another district court previously entered such an order under circumstances analogous to those presented by this case. In United States v. Calabrese, 2007 WL 2075630 (N.D. Ill. July 13, 2007), the court was conducting a highly publicized trial involving the Chicago Outfit. There, defense counsel disclosed in the early stages of the trial a sealed portion of the government’s proffer of a co-conspirator’s statements; in addition, “one of the trial participants ha[d] been quoted (on more than one occasion, and even subsequent to an oral admonition from the Court) making arguably prejudicial comments on a web log.” Id. at *2. The court found that these and any future statements to the press about the merits of the case had a “substantial likelihood” of prejudicing the parties’ ability to receive a fair trial. Id. at *2-3. The court found that such comments to the press were likely to increase the volume of press coverage and contribute to “a carnival-like atmosphere.” Id. at *2. The court determined that “[c]ommentary or spin” from lawyers was particularly likely to prejudice jurors, hindering their ability to remain impartial and to decide the case solely based on evidence presented in court:

The risk that jurors will be prejudiced by news reports that simply recite that which happened in open court is quite small. Even if seen, heard, or read, such reports merely reiterate that to which the juror has already been exposed. Commentary or spin is different. It does not merely reiterate what has already been before the jury; it applies the speaker’s own gloss to material presented to the jury. It is, at best, comprised of material suitable for closing argument. There is a time for closing argument-it comes at the end of the case, not at the end of each court day.

Id. at *3. After considering and rejecting alternatives to a gag order, such as change of venue and sequestration, the court determined that a gag order applicable to “lawyers appearing in the case and parties” was necessary to protect the parties’ rights to a fair trial. Id. at *2-3.

Likewise, Shkreli’s inflammatory “commentary or spin” (id.) in multiple fora poses a substantial likelihood of materially prejudicing the trial by creating a “carnival-like atmosphere” (id.); indeed, Shkreli will be the subject of significant media attention every time he speaks or writes during the trial. Shkreli’s comments, amplified by multi-platform media outlets, pose great risk of tainting the jury pool. Although the government assumes

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that the jury will be conscientious about following the Court’s instructions, the more intense the media attention becomes (and the government anticipates it will only increase if Shkreli tries this case in the press) and the longer the trial lasts, the greater the likelihood that a juror will inadvertently be exposed to prejudicial external influences, thereby undermining the effectiveness of the Court’s instructions.

Courts have also issued gag orders to protect jury deliberations. See Order, Dkt. No. 747, United States v. Blagojevich, No. 08-CR-888 (N.D. Ill. June 16, 2011) (“all counsel of record to this case are hereby barred from making any public statement about the trial of Defendant Rod Blagojevich until the jury verdict is returned and read in open court . . .”); Order, Dkt. No. 748, United States v. Blagojevich, No. 08-CR-888 (N.D. Ill. June 24, 2011) (reaffirming gag order). The orders in Blagojevich are instructive because they were issued while the defendant waged a public relations campaign during trial that ventured into misrepresentations of pretrial developments and efforts to influence jurors and the public. See, e.g., Gov’t Resp. to Defs. Mot. to Reconsider Gag Order and Sealing, Dkt. No. 746, No. 08-CR-888 (N.D. Ill. June 22, 2011). Shkreli has launched a similar campaign here.

In sum, Shkreli cannot be permitted to create an atmosphere that substantially increases the risk of tainting the jury with external influences. Less restrictive alternatives, such as admonishing the jurors not to conduct internet research and questioning jurors about their exposure to media accounts of the trial will not suffice. See Neb. Press Ass’n v. Stuart, 427 U.S. 539, 563-64 (1976). An order prohibiting counsel and the parties from making certain extra-judicial comments regarding the case is thus “the least restrictive and most effective means” of ensuring a fair trial in this case. See Calabrese, 2007 WL 2075630, at *2; Levine, 764 F.2d at 599-600 (rejecting alternatives after detailed discussion); see also Brown, 218 F.3d at 430-31.

III. CONCLUSION

For all of the foregoing reasons, the government respectfully requests that this Court enter an order prohibiting the parties and counsel, from the date of any order to be entered by the Court until a verdict is rendered, from providing any public commentary about the trial, the parties and any trial witnesses, whether via social media or by communications with the press. The government further requests that the publication of publicly-available information, such as trial testimony, admitted exhibits and scheduling matters, be exempted from any such order.

To the extent that the Court determines not to enter such an order, the government respectfully requests that the Court consider semi-sequestration of the jury as an alternative. The government is deeply concerned that Shkreli’s statements about the evidence at trial and his personal views of that evidence in the courthouse itself—which are

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then repeated by other individuals in the courthouse—will inadvertently be overheard by members of the jury during their breaks, and render a fair trial impossible.

Respectfully submitted,

BRIDGET M. ROHDE Acting United States Attorney

By: /s/ Jacquelyn M. Kasulis Alixandra E. Smith G. Karthik Srinivasan Assistant U.S. Attorneys (718) 254-7000

cc: Clerk of Court (KAM) (by ECF) Counsel for Defendant Shkreli (by ECF)

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METRO ‘Pharma Bro’ compares prosecutors to ‘junior varsity’ By Priscilla DeGregory June 30, 2017 | 2:31pm

Martin Shkreli R. Umar Abbasi

“Pharma Bro” just can’t keep his mouth shut.

Martin Shkreli slammed Brooklyn prosecutors as a “junior varsity” team that’s blaming him for “capitalism” in a nearly 10-minute rant to reporters Friday.

The 34-year-old notorious drug price gouger waltzed out of the Brooklyn federal courtroom – where he’s being tried for securities fraud – and into an overflow room where a handful of reporters were camped SEE ALSO out during a lunch break.

“They blame me for everything,” Shkreli kvetched to the reporters. “They blame me for capitalism.”

He called prosecutors in the Eastern District of New York the “junior varsity” to those in the Southern District in Manhattan. Case 1:15-cr-00637-KAM Document 261-1 Filed 07/03/17 Page 2 of 2 PageID #: 3835 Investor: 'Pharma Bro' He also blasted Sarah Hassan, who testified Thursday that he tried to woo her in order to get her rich dad milked me for millions Fred Hassan to invest in one of his hedge funds.

“She is not a victim,” he said, adding that she made money off her investment with his hedge fund MSMB Capital.

Shkreli, who is accused of running an $11 million Ponzi scheme using his firm Retrophin and other drug companies to pay off MSMB investors, even took aim at his lawyer, Ben Brafman.

He insisted that news reports about Brafman denying he was paid more than $4 million for his legal services were inaccurate.

At a hearing last week, Brafman said he was never paid the hefty advance as he asked Judge Kiyo Matsumoto to lower his client’s bail from $5 million to $2 million because Shkreli’s allegedly broke.

FILED UNDER COURTS, MARTIN SHKRELI, MONEY LAUNDERING, PONZI SCHEMES, TRIALS, TURING PHARMACEUTICALS

Recommended by

Case 1:15-cr-00637-KAM Document 261-2 Filed 07/03/17 Page 1 of 3 PageID #: 3836

Business Martin Shkreli makes surprise visit to reporters: ‘The world blames me for almost everything’

By Renae Merle June 30

NEW YORK — During the first week of his trial for securities fraud, the typically boisterous Martin Shkreli has sat quietly at the at the defense table, smirking, taking notes and whispering to his attorneys. On Friday afternoon, Shkreli strolled into a room full of surprised reporters and proceeded to handicap his case so far and ridicule prosecutors.

“The case is going well,” said Shkreli, 34, who boasted that his attorney, Benjamin Brafman, “brought down the house” with his opening statement defending the outspoken hedge fund and pharmaceutical executive.

In his opening statement, Brafman told the jury that Shkreli may be strange, but that was not enough to convict him: His investors “used his genius and made millions. … Despite his flaws and dysfunctional personality, Martin Shkreli is brilliant beyond words.”

Prosecutors allege that for five years Shkreli lied to investors in two hedge funds and the biopharmaceutical company Retrophin, all of which he founded. Shkreli told investors that he had a successful track record as a hedge-fund manager and sent them false performance reports and backdated documents to cover up his losses, prosecutors allege.

Shkreli’s trial has garnered national attention as much for the charges he faces as for his boisterous personality. When his decision to increase the price of Daraprim 5,000 percent outraged critics, Shkreli defended the move and said he could have increased it more. Even after being indicted, he struggled to take his attorney’s advice to stay quiet, continuing to battle critics on Twitter and hold hours-long talks about his life on YouTube.

His trial initially got off to a slow start as U.S. District Judge Kiyo Matsumoto struggled to find jurors who said they didn’t already dislike the Brooklyn native. One potential juror said that Shkreli is “the most hated man in America,” while another asserted that “from everything I’ve read, I believe the defendant is the face of corporate greed in America.” Case 1:15-cr-00637-KAM Document 261-2 Filed 07/03/17 Page 2 of 3 PageID #: 3837 When Shkreli walked into an “overflow” room set up by the court for the large media contingent following the trial, Shkreli appeared calm, friendly and confident about his legal prospects.

He also expressed disdain for the prosecution team from the Eastern District of New York in Brooklyn, mocking them as the “junior varsity” to the federal prosecutors in Manhattan.

“Do I want to exonerate myself? Yes,” he said.

“I think the world blames me for almost everything. … They blame me for capitalism. … Blame me for EpiPen.”

During the jury selection, some potential jurors incorrectly associated Shkreli with EpiPen, a popular allergy treatment whose price has risen about 500 percent in a decade. Shkreli has been criticized for raising the price of Daraprim — a 62-year-old drug primarily used to treat newborns and HIV patients — from $13.50 to $750 a pill.

Shkreli also said the media had not emphasized enough that the prosecution’s first witness, Sarah Hassan, an investor in one of his hedge funds, had made a significant profit. “It was kind of interesting that the victim of this case made 10 times her money … we should all only be this victimized in life,” Shkreli said. He added that he made nothing from the transaction.

Hassan testified that she invested $300,000 into one of Shkreli’s hedge funds and was eventually given $400,000 in cash and more than 50,000 in stock in Retrophin, a company run by Shkreli. She sold that stock for about $900,000.

The unusual encounter lasted just a few minutes. As he chatted with the assembled reporters, some of whom he seemed to know by name, Shkreli’s attorney appeared at the door.

“Can I talk to you a minute?” asked Brafman, and Shkreli was gone.

Read more about Martin Shkreli:

‘He was born this way’: Martin Shkreli’s attorney offers defense as securities-fraud trial opens

‘Pharma Bro’ Martin Shkreli trial hits speed bump: Finding jurors who don’t already dislike him

Martin Shkreli’s trial shows just how angry people are about drug prices

Renae Merle covers white collar crime and Wall Street for The Washington Post.  Follow @renaemerle Case 1:15-cr-00637-KAM Document 261-2 Filed 07/03/17 Page 3 of 3 PageID #: 3838 Case 1:15-cr-00637-KAM Document 261-3 Filed 07/03/17 Page 1 of 2 PageID #: 3839

Shkreli slams feds in Brooklyn as 'JV'

BY ANDREW KESHNER NEW YORK DAILY NEWS Updated: Friday, June 30, 2017, 5:24 PM

Martin Shkreli is bad at being quiet. (JESSE WARD/FOR NEW YORK DAILY NEWS)

An unapologetic Martin Shkreli used a lunch break in his Brooklyn trial on Friday to plead his innocence — and bad-mouth the feds prosecuting him. The Pharma Bro’s high-prole securities fraud trial took an odd twist when Shkreli decided to talk smack with reporters. “They blame me for capitalism,” Shkreli told reporters before defense attorney Ben Brafman asked him to step out of the room because he had to talk to him. Shkreli had walked into a room reserved for reporters so he could talk about his trial for a few minutes, get some thoughts on how the trial was going and question the press coverage. He threw shade on the prosecution case, calling the Brooklyn U.S. Attorney’s ofce “junior varsity” compared to the Manhattan U.S. Attorney’s ofce. Shkreli was also asked if he’d considered whatever deal the feds may have oated his way. Case 1:15-cr-00637-KAM Document 261-3 Filed 07/03/17 Page 2 of 2 PageID #: 3840 He said no. “Do I want to exonerate myself? Yes,” he added. Shkreli noted a friend had come into the makeshift press room — a repurposed courtroom — the other day and tried to sit on the judge's seat. That didn't go over well with the court security staff, he noted. Shkreli said he was somehow taking the rap for everything, like the epi-pen. A Brooklyn U.S. Attorney spokesman declined to comment on Shkreli’s criticism. During the morning session, an Arizona investor recalled for jurors how he got burned by Shkreli when an early hedge fund run by the Pharma Bro tanked. Josiah Austin said he met Shkreli about 10 years ago, remembering Shkreli as young, smart and "a little cocky." Austin said Shkreli sought success and riches, adding he wanted to be Steve Cohen, a well-known hedge manager. Austin sank almost $5 million in Shkreli’s hedge fund, Elea Capital. He said Shkreli never paid him back after the hedge fund tanked. Austin didn't buy into Shkreli’s other two hedge funds or his biopharmaceutical business, Retrophin. Austin said after Elea went south, he still regards Shkreli as an intelligent, smart guy "but I didn't particularly want to do any more business with him." On cross examination, defense attorney Marc Agnilo brought out how Shkreli was a hard worker. Shkreli, 34, the former head of Turing Pharmaceuticals known as the “Pharma Bro,” was vilied after he jacked up the cost of Daraprim, a lifesaving drug that helps cancer and AIDS patients ght infection, to $750 a pill from $13.50. The rst week of Shkreli’s trial has been loaded with reworks. Jury selection that started Monday featured a number of jurors who admitted they couldn’t be fair. “I looked right at him, and in my head, I said, ‘That’s a snake,’” one potential juror said before she was dismissed. Brafman unsuccessfully requested a mistrial, complaining of the media coverage stemming from the jury selection.

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HEALTH CARE HOSPITALS PHARMA HEALTH INSURANCE MODERN MEDICINE 'Pharma bro' Martin Shkreli blasts prosecutors as 'junior varsity,' says investor wasn't 'victim' and criticizes headlines in lunch visit to reporters Shkreli surprised journalists by talking to them at length unprompted. He said one investor who testified against him wasn't a victim because she ended making four times her money back. "Do I want to exonerate myself? Yes."

Dan Mangan | @_DanMangan Friday, 30 Jun 2017 | 9:19 PM ET

Today's Mortgage Rate 3.12% Pharma Bro's defense attorney APR 15 Year Fixed expresses frustration over his talking  to press Friday, 30 Jun 2017 | 5:08 PM ET | 03:29 Select Loan Amount

"Pharma Bro" Martin Shkreli, during a surprise visit with reporters covering his fraud trial Friday, criticized the people prosecuting him as the "junior varsity," claimed he never considered taking a plea deal and $225,000 said people "blame me for everything."

Shkreli also griped about news headlines regarding his case, and teed off on a young woman who had testified he for almost a year dragged out redeeming her $435,000 investment in his hedge fund, saying she wasn't a "victim."

And Shrkreli said that several documents discussed at the trial, which raised questions about his honesty with investors, were prepared by other people.

FROM THE WEB Sponsored Links by Taboola "Do I want to exonerate myself?" he asked a small group of journalists when asked if he had desired to have his day in court. Why These 10 SUVs are the Cream of the Crop Kelley Blue Book "Yes."

Top 10 Affordable SUVs Case 1:15-cr-00637-KAM Document 261-4 Filed 07/03/17 Page 2 of 7 PageID #: 3842 He only stopped talking and left when his high-powered lawyer SUV Search

Benjamin Brafman peered in the room and asked, "Martin, can I talk to you for a minute?" Why I Switched To Harry's, And Why I'll Never Leave Harry's Later, Brafman said would prefer Shkreli any more impromptu press conferences "because sometimes he doesn't have a filter." Emma Watson's best looks "I'm hoping he doesn't do it ever again," Brafman told reporters. MSN

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Martin Shkreli's own defense lawyer calls his Twitter history 'just horrific' during jury selection

Soros' son stepping down to set up his own fund

'Is he stupid or CNBC's Fast Money Follow crazy?' More potential @CNBCFastMoney jurors bounced from ICYMI: @Megtirrell catches up with "Pharma Bro" Martin Shkreli Martin Shkreli trial and his lawyer leaving court today Shkreli's lawyer gives 5:23 PM - 30 Jun 2017 explosive argument defending 'Pharma 23 50 Bro'; prosecutors say Hedge fund manager At the end of the day's session, before leaving court, Shkreli told one Kyle Bass: Our relationship with reporter "I have to be very careful about who I talk to. I might get into China has taken trouble." Shkreli jury picking And Shkreli said to a sketch artist, "You're talking to 'Rain Man.' I goes very slow: 'I remember everything." think he's a very evil man,' one woman The "Rain Man" reference was to Brafman's blistering opening MOST POPULAR argument, during which he said Shkreli's business colleagues used the name of that Tom Cruise movie behind his back because it featured an Microsoft is 1. preparing to lay off autistic savant, played by Dustin Hoffman. Those colleagues thousands of supposedly suspected the highly intelligent Shkreli also might be employees, autistic. according to report

Shkreli's unexpected remarks came during the lunch break of his Elon Musk gives securities fraud trial in Brooklyn, NY, federal court. 2. green light: Tesla’s He is charged with looting millions of dollars from Retrophin, the first mass-market car, the Model 3, hits publicly traded drug company he founded. Prosecutors claim he used production this week the money to repay to investors whom allegedly defrauded at two hedge funds he had run, in addition to paying off personal debts. Dow hits all-time 3. high, jumps 187 Shkreli walked into a courtroom that is on the same floor as the one points, as bank where his trial is being conducted, and saw several reporters. The room stocks climb higher has an video and audio feed of the trial for spectators who don't have seats in the main courtroom. Ron Paul says it "Welcome," one reporter said when she saw Shkreli. 4. won't be a 'total shock' if stocks The 34-year former pharmaceuticals executive then began talking plummet 25% and freely for about five minutes. gold soars 50% by October Case 1:15-cr-00637-KAM Document 261-4 Filed 07/03/17 Page 3 of 7 PageID #: 3843 States yanking electric-car incentives and slapping on new fees to pay for infrastructure Pharma executive testifies at Martin  Shkreli trial Friday, 30 Jun 2017 | 1:48 PM ET | 03:02

Shkreli first mentioned that a friend of his had been in the the trial's so- called "overflow" room earlier in the week, and tried to sit on the judge's bench.

When a reporter asked Shkreli what he thought of the trial's opening arguments on Wednesday, he shot back, "How do you think they went?"

Shkreli then suggested that his lawyer Brafman, who gave an impassioned opening, had far outclassed assistant United States Attorney G. Karthik Srinivasan, who argument was more workman-like.

Shkreli several times mentioned that Srinivasan had joined the prosecutor's office in the Eastern District of New York only two years ago.

He also pointed out that Srinivasan before that had been an associate at the Manhattan law firm Paul, Weiss, Rifkind.

When a CNBC reporter noted that the Eastern District is a well- regarded prosecutors' office, one which as late as 2015 had been led by former U.S. Attorney General Loretta Lynch, Shkreli scoffed.

He then called the Eastern District the "junior varsity."

There is a long-standing intramural rivalry between the U.S. Attorney's Office for Eastern District of New York — which encompasses Brooklyn, Queens, Staten Island and Long Island — and prosecutors in the Southern District of New York, whose ambit includes Manhattan and its Financial District.

In New York's legal world, many see the Southern District as the more elite of the two, a fact that Shkreli seemed keenly aware of.

John Marzulli, a spokesman for the United States Attorney's Office for the Eastern District, declined to comment on Shkreli's scornful remarks.

Shkreli also suggested that Winston Paes, who had been the lead prosecutor in the case, chickened out of taking it trial, because he had accepted a job several months at the large Manhattan firm Debevoise & Plimpton.

"Why would you walk out on the biggest case of your life?" Shkreli asked.

Paes, through a colleague, declined to comment to CNBC. Case 1:15-cr-00637-KAM Document 261-4 Filed 07/03/17 Page 4 of 7 PageID #: 3844

Elizabeth Williams | CNBC

Defense attorney Ben Brafman stands at the defense table with Martin Shkreli during his opening statement.

Asked if he thought Brafman's opening argument was worth $4 million that has supposedly been paid to that attorney's law firm, Shkreli disputed the accuracy of that amount. He also said the reporter who asked about it always gets facts wrong.

But a 10-Q filing in May by Retrophin, which ousted Shkreli in 2014, says he claimed the company owed him $5 million in legal expenses that he had incurred in defending both the criminal case and a related civil case by the Securities and Exchange Commission.

Retrophin, according to the company's filings, to date has advanced $2.8 million in pre-trial fees for Shkreli's lawyers, and $2 million in trial fees, for a total of $4.8 million.

At the same time, Retrophin is suing Shkreli for allegedly ripping off the company, is and cooperating with federal authorities in their cases against him.

Brafman, during a hearing last week, said his firm has been paid $800,000 less than the $4.8 million tally. The difference between the two amounts is $4 million.

Shkreli on Friday said he thought the trial, which was in its third day since jurors were seated, was going well for the defense.

But he bemoaned the headlines about the testimony of Sarah Hassan, who invested $300,000 of her own money in his hedge fund in 2011.

Shkreli complained that those headlines did not highlight the fact that she ended up getting a total of $1.3 million in cash combined with the proceeds of sales of Retrophin stock given her. Her own family's hedge fund, which she manages, netted even more from selling Retrophin stock it had acquired as a result of an initial $125,000 stake in the company.

"How can a victim make $2.7 million?" Shkreli asked. "She's not a victim."

But Hassan had testified that Shkreki for almost a year stalled in redeeming her personal investment stake — which he claimed had grown to $435,000 — after she asked to be paid out upon learning he was closing that MSMB Capital.

She also said Shkreli surprised her by telling her that he had, without getting her permission, used her personal money at MSMB to capitalize the start up of Retrophin. Case 1:15-cr-00637-KAM Document 261-4 Filed 07/03/17 Page 5 of 7 PageID #: 3845 Shkreli told reporters Friday that he believed jurors were most

impressed not by Hassan's complaints about the long delay in getting her money, but by the fact that she made "four times" her investment.

"I made nothing" from MSMB Capital, Shkreli added.

"They blame me for everything," Shkreli said, apparently referring to prosecutors and his other critics.

"Blame me for capitalism," Shkreli said. "Blame me for EpiPen."

Several prospective jurors earlier this week were excused from consideration because they incorrectly believed Shkreli had raised the price of the anti-allergy device EpiPen.

In reality, Shkreli drew widespread public scorn in 2015 for hiking the price of an anti-parasite drug named Daraprim by more than 5,000 percent while serving as CEO of Turing Pharmaceuticals.

Justin Solomon | CNBC

Martin Shkreli on lunch break from his court trial in Brooklyn, New York on June 29th, 2017.

Shkreli also told reporters that he did not prepare tax documents or Retrophin marketing documents that Hassan testified about on Thursday. Other people did that, he said.

Hassan had testifed that Shkreli dragged his feet in giving her tax documents related to her investment in his hedge fund, and that when she received them they mistakenly listed her father's name as part of the investment.

Fred Hassan, her dad and a well-known pharma executive, also was listed as a member of Retrophin's board of directors on a pitch presentation assembled when the company was being created, Sarah Hassan said.

Fred Hassan said he never invested in Shkreli's hedge fund, nor did he have any role as a director, adviser or investor in Retrophin. Instead, Hassan and his daughter testified, Sarah Hassan invested $125,000 from the family's own hedge fund, DynaGrow, in Retrophin.

More than 90 percent of DynaGrow's assets belongs to Fred Hassan and his wife.

Shkreli played coy and declined to answer a reporter when asked if prosecutors had offered him a plea deal. But he noted that most federal criminal defendant plead guilty instead of going to trial.

When asked directly if he had turned down any offer from prosecutors, which likely would have included a reduction in the number of criminal counts he would have pleaded guilty to, Shkreli said he had. Case 1:15-cr-00637-KAM Document 261-4 Filed 07/03/17 Page 6 of 7 PageID #: 3846 Brafman, Shkreli's lawyer, told CNBC as he walked outside of court at

the end of the day, "I really think Martin is not going to be speaking to you guys again if he listens to me."

"I don't think anything Martin says by now is going to affect the case one way or the other, but I would very much appreciate it if he did not talk to the press because sometimes he doesn't have a filter," said Brafman.

As Bradfman spoke, Shkreli walked by his side, grinning broadly.

Dan Mangan Reporter

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