A federal judge temporarily banned notorious “Pharma Brother” Martin Shkreli from streaming or distributing copies of a unique Wu-Tang Clan album that he seized as part of his 2017 fraud conviction.
Judge Pamela Chen’s order came Tuesday evening, a day after the company that bought the album “Once Upon a Time in Shaolin” for $4.75 million brought Shkreli to trial in U.S. District Court in Brooklyn, New York. had sued.
The lawsuit alleges that Shkreli, who remains at large pending his criminal case, apparently retained copies of the hip-hop album after it was sold and did not play it online until Sunday, violating his confiscation order.
A spokesman for the U.S. Attorney’s Office in Brooklyn told CNBC “no comment” on Wednesday when asked whether prosecutors would take action against Shkreli in response to the claims in the civil lawsuit filed by Cayman Islands-based PleasrDAO.
Chen wrote in her order on Tuesday that PleasrDAO is “likely to succeed on the merits” of the complaint, “or raises very serious questions relating to the merits of the confiscation order, violations of the Defend Trade Secrets Act” and “misappropriation.” Trade secrets.
The judge has also scheduled a hearing in the case for June 25, at which she could continue the restraining order against Shkreli and order him to give the plaintiff an inventory of all copies of the album he had kept.
Steven Cooper, an attorney for PleasrDAO, said Wednesday he could not comment on whether he had contacted prosecutors about Shkreli’s alleged violation of his confiscation order.
“Based on these activities, I wouldn’t be surprised if the district attorney’s office or the parole board were interested in this matter,” Cooper told CNBC.
The lawyer said his client sued Shkreli because “his behavior increased dramatically” and because PleasrDAO plans to play some of the album’s songs in an exhibition at a museum in Tasmania, Australia, starting later this week.
The lawsuit said that on Sunday, Shkreli posted on his social media account
Less than an hour later, Shkrelis hosted
“During the Spaces session, Shkreli played music from the album for every participant to hear. According to X, 4.9 thousand listeners tuned in,” the lawsuit says.
Cooper said: “His bad behavior had been going on for a very long time and a lot of it was directed at my client.”
“The fact that he kept copies.” [of the album] violate his forfeiture and could have different consequences than the civil lawsuit,” Cooper said.
A lawyer for Shkreli did not immediately respond to a request for comment.
Shkreli, 40, was convicted of securities fraud in 2017. Jurors found that he misled investors about the performance of two hedge funds he ran and that he conspired to fraudulently manipulate the shares of a pharmaceutical company he founded.
Before his conviction, Shkreli became nationally infamous in 2015 for raising the price of the life-saving drug Daraprim by more than 4,000% overnight at another pharmaceutical company he ran.
In January, a federal appeals court upheld a lifetime ban on Shkreli from working in the pharmaceutical industry and an order to pay him more than $64 million in skimmed profits for blocking competition with Daraprim.
Shkreli was released from prison in May 2022 and is now serving a three-year supervised release sentence.
As part of his criminal conviction, Shkreli was ordered to forfeit nearly $7.4 million to the U.S. government and forfeit a number of assets to comply with that order.
The assets included “Once Upon a Time in Shaolin,” the Lil Wayne album “Tha Carter V,” a paper engraving by Pablo Picasso and $5 million in an E-Trade brokerage account.
Shkreli purchased the Wu-Tang Clan album for $2 million in 2015, setting a Guinness World Record for the most expensive work of music ever sold. The 31-track, two-disc Wu-Tang Clan album came in a hand-carved nickel and silver cased box, which in turn was housed in a larger leather box.
In July 2021, while Shkreli was still in prison, the album was sold by the government for an undisclosed price to a buyer who was not publicly named. At the time of the sale, Shkreli owed nearly $2.4 million due to the forfeiture order.
In PleasrDAO’s lawsuit, the company said it purchased “Once Upon a Time in Shaolin” in two separate transactions in 2021 and 2024 for approximately $4 million and $750,000, respectively. The second purchase, the lawsuit says, was for “the copyright and exclusive right to use the recordings.”
PleasrDAO’s lawsuit described the company as “an international entity that collects and publicly displays culturally significant media and materials with the intent of creating ecosystem experiences that promote participation and interaction in the United States and other countries.”
Wu-Tang Clan’s lawsuit said: “The album should constitute the only existing copy of the record, music, data and files, and packaging.”
“It appears, however, that at the time of the seizure, Shkreli was unlawfully retaining copies of the data and files and making them available to the public and/or intending to do so,” the lawsuit says.
“Such actions would cause PleasrDAO to suffer significant financial and irreparable harm and give rise to numerous claims for damages under the forfeiture order and common law,” the lawsuit states.
The lawsuit notes that when Shkreli purchased the album in September 2015, he entered into an agreement with the album’s producers that prohibited Shkreli from using the album “for any reason other than for ‘exhibition or reproduction’ for 88 years.” “to reproduce or exploit in places that are not normally used as venues for large concerts.
The statement of claim also cites the confiscation order imposed in the criminal case against Shkreli, which prohibits him from any act that would diminish, damage or destroy the assets he has transferred, as well as any act that would affect the availability or value of those assets.
PleasrDAO said in the lawsuit that during live streams to followers on social media platforms beginning in June 2022, a month after his release from prison, Shkreli admitted to playing “Once Upon a Time in Shaolin” to followers on those streams.
“On June 22, 2022, during another livestream on YouTube, Shkreli was asked if he still had a copy of ‘Once Upon a Time in Shaolin.'” Shkreli said, “I played it on YouTube the other night, even though someone asked 4 million dollars for it,” the lawsuit says.
Last month, the lawsuit said: “Shkreli appeared in a video podcast posted on YouTube.”
“In the video, Shkreli explained that he burned the album and sent it to about 50 different girls[.]He then asked the interviewer, “Do you know how many?” [expletive] The album got me? Do you think I didn’t make a damn copy of it? Are you kidding?’” the lawsuit said. “He also stated that ‘thousands of people heard it.’ I sent the MP3s to all these people.’”
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2024-06-12 19:31:16
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