FTC Files Its Cogent Reasons To Keep December Daraprim® Civil Monopoly Trial Date In Manhattan…

If for no other reason than that COVID (shut downs and delays) have now a year later greatly compressed all federal trial docket timelines, in Manhattan — I might have ventured to predict that Martin’s latest gambit would fail. But there is much more: the law doesn’t really support his clearly last minute and dilatory attempt to put off trial here. [That said, I get it: attending the trial means having to leave the relatively sane environment of FCI Allenwood Low, and return to the MDC in Manhattan — fetid, dangerous… overcrowded and freezing often in December. So, Martin would much prefer to already be at a halfway house, when this trial begins — but that is not how it works. He is being treated no worse than anyone else. I may dislike those conditions — but he isn’t… special.]

From the response papers just filed tonight, it is clear he knew for months that attending this [redacted] program might be an issue for scheduling a trial — but only raised it after there would be no way to effectively accommodate both schedules. He was apparently banking on the court to give him yet another free pass. But I think that time has ended — and perhaps it ended… long ago.

The central point the FTC lawyers make below, echoes mine of this week: the court is under no duty to shorten his sentence. Period — and it is very unclear that, even if the court moved the trial date — it would actually result in a shorter sentence in any event.

Here’s the business end of it — and the full PDF file:

Setting aside [Martin’s] misplaced constitutional concerns, having to serve the full term of a lawful sentence is not “prejudicial” because it was imposed as a direct result of Shkreli’s own illegal conduct….

Because Shkreli’s decision-making precipitated his current circumstances, they cannot serve as good cause to move the date of trial.

Finally, Shkreli further fails to show that an adjournment will meaningfully change his ability to participate at trial. When Shkreli moved to stay discovery in December 2020, he claimed that he could be released from prison as soon as September 2021. ECF 317 at 1. Now Shkreli claims he will be available for trial after May 1, 2022 based on another chain of uncertain events, including: (1) Shkreli will successfully complete [redacted program]; (2) Shkreli will be released from prison a year early; and (3) Shkreli will be placed in a New York City halfway house. But even if each of these contingencies come to pass, Shkreli will have to continue to participate in [redacted program] which could have the same impact on his availability to attend trial….

Plaintiffs “and the public have a significant interest in resolving the issues raised by the plaintiffs’ claims with due expedition.” ECF 368 at 3 (rejecting Shkreli’s motion to stay discovery). Additionally, the Plaintiff states are seeking equitable monetary relief with the intention of compensating consumers harmed by Shkreli’s [unlawful Daraprim® monopolization] scheme. Shkreli’s stated rationale for delaying trial fails to overcome the public interest in resolving the issues in this case in a timely manner. For these reasons, Plaintiffs respectfully request that the Court deny Shkreli’s motion to adjourn the trial….

Parts of the filing refer to Martin’s private health conditions / needs — which presumably the [redacted] program is designed to alleviate, or at least address. So portions of it are sealed from view, on the public docket — as you may discern, here.

Now you know — as I say, I expect the court will keep his current trial date.

Holmes’ Trial Log / Summary For October 14, 2021 [And, Condor’s Friday Trivia]…

Let’s call this “Condor’s Conjectures” — A Friday Trivia Edition: as more evidence is about to come in (in just a few hours, West Coast time) this Friday morning, in the continuing Holmes felony matter, it would seem, unless Elizabeth Holmes takes the stand and does what I would call an Oscar worthy acting job — and thereby achieves a jury nullification… she is going to be convicted.

There is just too much written proof, much of it in her own hand, that she intended to lie, about material matters, to garner investment/investor funds — of nearly a billion dollars.

If however the jury sees her as a relative waif, an innocent, viciously preyed upon by Balwani’s alleged abuse… they could nullify (technically, acquit — but a small chance, indeed). Such an outcome would be against what the law requires of them, and would be a manifest dereliction of their duties — and against the now-overwhelming weight of the evidence. But we are also now approaching the point where the able USDC Judge Davila, sitting in San Jose for weeks and weeks, as the evidence came in — he could reject such a jury verdict, saying in effect no reasonable jury could so ignore the law and evidence — and toss the jury’s form, and find her guilty from the bench. Of course, she could then likely appeal (and win), citing the Sixth Amendment.

I do think it all highly unlikely, as I say. But at least one MSM newspaper has it that the Buddhist-leaning juror has since ultimately agreed to stay on the case, after a private chat with Judge Davila — away from the other jurors, but in front of counsel for all parties. [She may yet decide to depart at the close of the trial, and then Judge Davila would seat one of the alternates. But almost all other MSM outlets report that she was in fact excused from service. If she is still in, under this scenario she (and perhaps other jurors) would simply ignore the evidence — and let Ms. Holmes walk — so, the above admittedly crazy scenario could transpire.

Ironically, precisely because Judge Davila (trying to be helpful, of course) expressly explained to her that he would impose the sentence, not the jury — she could decide nullification is the preferred route. That is to say, she now knows from her seat, as a juror, the only sure way to prevent Holmes’ ultimately being jailed… is to nullify, from the jury room.

As I say, mostly fanciful… but, in any event, here is Thursday’s trial log / summary — from San Jose.

Onward to a gloriously sunny Fall Friday… with blazingly-orange and deep red leaves twisting in the winds….

Hat Tip — To “BillyTheKid”: Mr. Carreyrou’s Next Holmes Podcast Is October 21, 2021

This is truly… outstanding. Mr. TheKid pointed us to tweet threads on it all, while we were stuck in a conference room. [Just as we predicted, Holmes was a 100 per cent loser, today.]

The able Magistrate’s order is now published, in San Jose — here it is.

Mr. Carreyrou will, as a press person / news-gatherer under our First Amendment, be allowed to sit in on all future trial days. Woot.

And in a great bit of promotion, it (ironically, for Ms. Holmes) helps him let the world know that his next Bad Blood podcast will drop on October 21, 2021.

Big grins, all around, now. G’night.

[O/T; U] A Jaw-Slacking Banksy Update: Shredded “Girl With The Balloon” Just Sold (Again) For Over $25 Million!?

So, this is. . . amazing (and in a way, sort of disgusting, too). It just sold for over four times what it sold for almost exactly three years ago — in October of 2018. Click here, for that 2018 story. [I suppose Martin should have bought a Banksy, instead of the low-value Picasso drawing, huh?]

In any event, here is the latest — and the winning bidder may pay. . . in crypto-, according to reports:

. . .[A Banksy] painting that partially self-destructed at auction three years ago has sold once more, for a staggering £18.5 million ($25.4 million). . . .

“Love is in the Bin,” renamed from “Girl with the Balloon,” had a high estimate of £6 million ($8.3 million), six times its previous value of £1 million ($1.4 million). The artwork remains half-shredded in its frame, which concealed a mechanism to auto-destroy it after the hammer dropped at its original sale. . . .

For my part, I am going to need a minute, here — to digest all of this. I don’t know whether to laugh — or cry.

Here — again, for posterity, is the event that precipitated all of this — live:


Holmes Trial Log From October 13, 2021: Wags’ Ex-CEO Testified Holmes Lied About Other “Big Pharma” Investments…

Wade Miquelon, the former CFO of Walgreens, like the former CEO of Safeway, testified under oath that Elizabeth Holmes affirmatively lied to him, with the object of getting the company to invest/partner. And that they did, to the tune of over $140 million. [The Safeway total was well over double that.]

In his case, he was told that other big pharma companies had already made investments. In fact none of those mentioned by Holmes had invested — so I won’t name them here, either.

And that my friends, is called felony fraud — in the inducement. The defense has tried, on cross-, to make it seem like Safeway and Wags were lax in the diligence process — since they did not actually tear apart an Edison to see how it worked (or didn’t, in this case). But — of course — the defense fails to mention that Holmes was absolutely never going to let ANYONE see the inside of her faux-machine — as it would then undo the whole ruse.

So, she forever stiff-armed the suitors, with NDAs and legal arguments about IP/trade secrets — as the reason she would not provide even verified-by-independent-engineering versions of schematic drawings, to these corporations that were investing over a half billion dollars, between them. [True enough, both companies were potentially competitors, at their pharmacy outlets — if the device worked — but as a matter of black letter criminal law, that will not excuse outright pre-meditated… lying about material matters, in the sale of investment securities.]

In any event, here is yesterday’s five page trial summary, as prepared by court staff.

Onward, grinning — out into the afternoon’s sunshine — for a leisurely bike ride by the lake… be excellent to one another.

[U, X2] A Late Night Pair Of Updates: Martin Held In Jail, Through April 2023(?); Effects Of Receivership.

UPDATED @ 11 AM EDT, Thursday Morning — the FTC counsel has indicated by letter that the government will oppose Martin’s late breaking motion to move the trial into Spring 2022 — and will file a brief tomorrow (on Friday) explaining what the FTC’s view of the law here is. It will likely prevail. End update.

First, the more trivial one: the terms of the Phoenixus AG “loan” to Regnum oddly provide that if Phoenixus AG files bankruptcy (or a court-ordered receiver takes possession of substantially all the assets of Phoenixus)… the loan becomes immediately due and payable.

Which is kind of crazy, since (for example) if your bank lender goes bankrupt, you the debtor almost never must pre-pay that loan. It defies logic — unless we realize that Phoenixus AG may ALSO have cooked up this whole non-cash convert loan tonight as a way to discourage the Receiver (Mr. Abbott) from asserting control (through Martin’s old shares) of… Phoenixus. Afterall, when the loan comes due, it could then be converted into 20 million shares of Regnum, and presumably sold by Phoenixus.

If that is the Swiss thought — we know that US law on fraudulent transfers to frustrate creditors… will apply. In sum, the entire arrangement would be set aside by the federal or state courts, here — especially since there are PUBLIC shareholders of Regnum previously unaffiliated with the Martin / Phoenixus teams. So… if it is a ruse — it will fail. If on the other hand, it is really a bona fide funding of clinical development inside Regnum, it still will presumably create value reachable by the Receiver, since it will be in the chain of companies Phoenixus AG holds.

Now, the second item: in the FTC case, Martin’s lawyers have argued that it is unfair for the Manhattan federal courts (in the person of Chief Judge Cote) to hold a civil trial in December of 2021, on the Daraprim monopoly case… because if he is to attend the trial it will interrupt his treatment program, and thus push his release date back to April 2023, minimum.

And (they say), if he doesn’t attend trial — to be able to stay at Allenwood and complete treatment… he loses the right to supervise (and/or testify in) that civil trial. That however, claims too much, by half. There is no constitutional problem with recognizing that his own choices put him in jail (actually originally well-past April 2023), and he is only now seeking earlier release, by doing a treatment program — no one is (yet) ADDING to his sentence.

No, at worst, he is losing… a privilege, true — but not a right. And in any event, he has known for months about this civil trial date.

Here are the latest two documents on all of that: the letter / motion for a stay of trial date (to April 2022) — and the supporting declaration.

But to be sure, the able FTC lawyers have the better argument here, that no court owes him these sorts of privileges, or in fact essentially any, of any sort — while still incarcerated, related to his subsequent CIVIL litigation.

The upshot is… he made some really bad choices — ones that are having life long consequences.

That is the nature… of felony convictions. Not unusual, and not any form of discrimination, or vendetta against him. All felons might face this same problem, when sued civilly, for subsequent damages. [Think OJ here — and the Goldman family civil suits. He stayed in jail during some of those, on subsequent armed robbery charges. No problem.]

So — a busy day. We will save Holmes’ lies (to Walgreens’ top management) about big pharma backing that didn’t exist to entice Wags to partner, and invest in Theranos… for tomorrow.


A Fascinating After Hours SEC Filing, By Regnum Corp.: Nominally Borrowing US $1.5 Million, From Phoenixus AG For “Clinical Development”…

About a month ago, SevenScore (a Phoenixus AG subsidiary) and Regnum called off their previously announced merger agreement.

But apparently the two entities remain… entwined. Tonight after NASDAQ close, Regnum Corp. filed an SEC Form 8-K, disclosing that it had signed a convertible promissary note in the amount of $1.5 million US, for “clinical development” (among other matters), in favor of a lender… (coincidentally) called Phoenixus AG.

But because it is convertible, upon a raise of at least $5 million, it may well only result in Phoenixus AG getting a controlling stake in the stock of Regnum Corp. — and it is not at all clear that Phoenixus AG has actually lent real cash, TO Regnum to do the development. It may in fact be that Phoenixus AG is doing the supposed clinical development. So we may be back to this being (an albeit delayed) vehicle for Phoenixus AG to create/grab a public company — to peddle shares to Wall and Broad, all for (somehow) saving Martin’s stake (impossible to tell, at the moment).

Indeed, back when Regnum caught up its overdue 10-K filing this Spring, it said (at page 5) that via SevenScore (which is what it intended to rename itself, but actually never did so) it would focus “on developing and commercializing therapeutics that treat rare and infectious diseases, specifically in populations that are neglected or face adherence challenges. SevenScore’s primary asset is commercial rights of leronlimab (PRO 140) in all HIV indications within the United States. Leronlimab (PRO 140) is a CCR5 antagonist expected to receive an indication to treat Multi-Drug Resistant HIV infection, with the potential for multiple additional therapeutic indications in HIV….”

And there is nothing in the public record filings after calling off the merger that says the company ever became a neglected disease drug company. No, that has always been Phoenixus AG’s mantra.

So — as I say — this may simply amount to a delayed acquisition of control by Phoenixus AG, of Regnum, for the public shell — if and when Regnum gets over $5 million in new funding.

And it may well be that Regnum is “in” the clinical development business (not even?) in name only.

We shall see. Pretty goofy — but it might also point to a Mulleady deal, in the offing here.

[O/T? Not Really.] In Which A 28 Year Old Jan. 6 Felony Accused Tells A Judge He Responds Better To “Positive Reinforcement”. Hilarious.

This is tangential — true — but it is widely related (bear with me, here): we saw it with Virgil Griffith (then 32; now 38). We saw it with Martin Shkreli (then 31; now 38). We saw it with Elizabeth Holmes (then 28; now 37).

A fully-grown, 28 year old Jan. 6 accused, now in jail awaiting trial (after three prior chances — saw his bail revoked, for refusing to cooperate with the judge’s bail conditions) just told USDC Judge McFadden, on the record, in DC yesterday that he would do better with the courts, and the BoP — if they’d just use more… “positive reinforcement.” He’s learned that he personally doesn’t like… negative reinforcement, as a motivator.

And, he said it — with a straight face. He said he cried the day that Pre-Trial Services and the BoP fitted him with the earlier ankle monitor. But he proceeded to called a NY State judge’s home, in an attempt to get the judge(s) to recuse themselves (apparently after his court appointed lawyer told him that was no get out of jail “loophole” — that he would “100% certainly” be arrested for trying to “judge shop,” by successive supposed… DQs).

As you may see, I am not naming him — but trust me, he is a 01/06 defendant. He went through a broken window. But he then claimed a cop told him if he didn’t go past the interior hall of statues, he would “not be trespassing”. R-i-i-i-ight. Climbing through a broken window in the Capitol building, with people holding baseball bats and zip ties and batons… is per force… trespassing (in any sane world).

So my punch-line: USDC Judge McFadden said it was “nice” that the felony defendant before him liked “positive reinforcement“. But he quickly added This is not community college. You are credibly accused (on video) of serious felonies — you engaged in a pattern that shows contempt to our criminal justice system, to this Court. I have no confidence you would follow my orders….

I find that no set of conditions will guarantee you will appear for trial, absent incarceration. You are remanded.”

So — while I share Ms. Smythe’s frustration with much of the incarceration complex… some people simply will never get the message… from positive reinforcement. In fact, I might argue that it is the molly-coddling helicopter parenting and “excuse-makings” of their parents, elders and to a lesser extent — even their teachers… their whole lives long, that leads these thirty somethings to think… offering such nonsense — when facing dead-bang proof of felonies… is a proper (and winning) response.

I’m out.