a federal judge has temporarily banned infamous “pharma bro” Martin Shkreli from streaming or distributing copies of a unique Wu-Tang Clan album he forfeited as part of his 2017 criminal fraud conviction.
Judge Pamela Chen's order on Tuesday evening came a day after the company that bought the album 'Once Upon a Time in Shaolin' for $4.75 million was sued. Shkreli in U.S. District Court in Brooklyn, New York.
The lawsuit alleges that Shkreli, who remains under supervision in his criminal case, apparently kept copies of the hip-hop album after it was sold and only played it online on Sunday, in violation of his forfeiture order.
A spokesperson for the U.S. attorney's office in Brooklyn told CNBC “no comment” on Wednesday when asked whether prosecutors were taking action against Shkreli over the claims in the civil suit from Cayman Islands-based company PleasrDAO.
Chen wrote in her order Tuesday that PleasrDAO is “likely to succeed on the merits” of the complaint, “or raise significantly serious questions about the merits of the forfeiture order, violations of the Defend Trade Secrets Act” and “misappropriation of trade secrets.” ”
The judge also scheduled a hearing in the case for June 25, where she could continue the injunction against Shkreli and order him to give the plaintiff an inventory of all copies of the album he kept.
Steven Cooper, an attorney for PleasrDAO, said Wednesday he could not comment on whether he has been in contact with prosecutors about Shkreli's alleged violation of his forfeiture order.
“It wouldn't surprise me based on this activity that prosecutors or the probation office would be interested in this case,” Cooper told CNBC.
The lawyer said his client sued Shkreli because “his behavior had increased dramatically” and because PleasrDAO plans to play some songs from the album at an exhibition in a museum in Tasmania, Australia, starts later this week.
The lawsuit stated that Shkreli wrote a message on his social media account on
Less than an hour later, Shkreli's
“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 suit says.
Cooper said: “His pattern of bad behavior has been going on for a long time, and much of it was directed against my client.
“”The fact that he withheld copies [of the album] violated his forfeiture order, and there may be consequences other than the civil complaint,” Cooper said.
An attorney 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 stock of a pharmaceutical company he founded.
Before his conviction, Shkreli became nationally infamous in 2015 for rapidly raising the price of the life-saving drug Daraprim by more than 4,000% at another pharmaceutical company he led.
In January, a federal appeals court upheld a lifetime ban on Shkreli from working in the pharmaceutical industry and an order to pay more than $64 million in lost profits for blocking competition with Daraprim.
Shkreli was released from prison in May 2022 and is now serving a three-year term of supervised release.
As part of his criminal sentence, Shkreli was ordered to forfeit nearly $7.4 million to the U.S. government and surrender a series of assets to comply with that order.
Assets included 'Once Upon a Time in Shaolin', the Lil Wayne album 'Tha Carter V' an engraving on paper by Pablo Picasso and $5 million in an E-Trade brokerage account.
Shkreli bought the Wu-Tang Clan album in 2015 for $2 million, setting a Guinness world record for the most expensive musical work ever sold. The 31-track, two-disc Wu-Tang Clan album came in a hand-carved box set with a nickel-and-silver case, itself nestled within 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 identified. At the time of the sale, Shkreli owed nearly $2.4 million on 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 said, was for “the copyright in and exclusive right to exploit the recordings.”
PleasrDAO's lawsuit described the company as “an international entity that collects and publicly displays culturally significant media and materials for the purpose of creating ecosystem experiences that encourage participation and interaction in the United States and other countries.”
The lawsuit stated that the Wu-Tang Clan “album would be the only existing copy of the record, the music, the data and files, and the packaging.”
“However, it now appears that at the time of the forfeiture, Shkreli improperly retained copies of the data and files and released and/or intended to release them to the public,” the indictment said.
“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 said.
The lawsuit notes that when Shkreli purchased the album in September 2015, he and the album's producers entered into an agreement that prohibited Shkreli from duplicating or exploiting the album for 88 years “for any reason whatsoever” exhibit or play'” in spaces that are not normally accessible. used as a venue for major concerts.
The complaint also cites the forfeiture order imposed in Shkreli's criminal case, which prohibits him from doing any act that would diminish, damage or dissipate the assets he transferred, and any act that would reduce the availability or value of those assets affect.
PleasrDAO said in the lawsuit that during livestreams for followers on social media platforms beginning in June 2022, a month after his release from prison, Shkreli admitted to playing the “Once Upon a Time in Shaolin” for followers on those streams.
“On June 22, 2022, during another YouTube livestream, 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 day even though someone paid $4 million for it,” according to the complaint.
Last month, the indictment alleged, “Shkreli appeared on a videotaped podcast posted to YouTube.”
“In the video, Shkreli stated that he 'burned the album and sent it to 50 different girls.'[.]' Then he asked the interviewer, 'Do you know how much [expletive] That album got me? You think I didn't make a damn copy of it? Are you kidding me?'' the complaint said. He also stated that “thousands of people listened to it.” I sent the MP3s to all these people.'”
