A New Jersey man said his construction business deals teetered as he begged Martin Shkreli to return his investments in a hedge fund, but the former pharmaceutical executive told him he was too busy running his new drug company.
Richard Kocher, 65, told a Brooklyn federal jury Monday that in one of his first forays into the hedge fund world in early 2012 he put $100,000 into Shkreli’s fund because he was assured investors could get their money back anytime. In May 2012, Kocher said he bailed out the fund, putting in another $100,000 after one of Shkreli’s employees told him it had a shortfall.
Shkreli announced in September of 2012 he was closing his funds to focus on Retrophin Inc., but promising customers a full refund or shares in the startup pharmaceutical company. Kocher pleaded for his money for five months but said he got a “run around” and Shkreli only offered 23,654 shares of Retrophin stock, which at the time he couldn’t sell.
“When you were in trouble and needed $100,000, I wired it over to you the next day,” Kocher wrote Shkreli in a March 2013 email. “I expect to get, in addition to this (insulting) untradable stock” my money back, he wrote.
Shkreli’s on trial accused of running his funds and Retrophin as Ponzi schemes and defrauding investors including Kocher. Prosecutors say he took hedge fund investors’ money and put it into Retrophin and later used $11 million from the pharmaceutical company to pay off his funds’ clients.
Shkreli eventually returned Kocher’s investments. Kocher also sold the Retrophin stock, after several years, making about $350,000 in total profit. But Kocher said he had to pay a lawyer, lost a business deal and lost time from his business, so he’s not sure if he ended up ahead.
As he pressed Shkreli for a return of his money, Kocher wrote: “I’m getting past the point of being patient.”
Kocher also questioned Shkreli’s dual roles, handling what was left of his hedge fund clients’ money while running Retrophin.
“I am also aware that you manage both companies, which seems to be a conflict of interest if our hedge fund doesn’t benefit from Retrophin,” he wrote.
Shkreli didn’t immediately reply to Kocher’s questions and at one point rebuffed him, replying he was “busy running the company,” referring to Retrophin.
Asked by a prosecutor for his reaction to Shkreli’s delays, Kocher told jurors: “I don’t think it mattered to him. It was more about what he could get away with.”