“Potentially Career-Ending Allegations” by Defense during Rock Greebel Trial

Posted On Friday, December 15, 2017

What Happened?

In the fraud trial of Martin Shkreli, co-defendant and former Katten Muchin Rosenman LLP attorney, Evan Greebel, the Court sent the jury home for the day after the defense made “potentially career-ending allegations” concerning an unnamed government official.

The Rundown

Greebel is charged for his role in Shkreli’s scheme of using sham consulting and settlement agreements for cash and shares of Retrophin, Inc., to pay off investors in one of Shkreli’s MSMB hedge funds. Trial commenced on October 20, 2017, and the defense began to present its case on December 6, 2017.

On December 13, 2017, Steven Rosenfeld, an investor in Retrophin and one of Shkreli’s MSMB hedge funds, took the stand for the defense. He testified that, while he entered into a consulting agreement that provided him with $200,000 and stock in Retrophin, he actually performed consulting services for the company.

His testimony went off the rails when defense counsel inquired about his meetings with the government.  First, defense counsel asked about a 2015 encounter with the FBI, where agents came to his home. Rosenfeld began to testify that he had asked the agents if he could call his attorney, but the prosecution objected, and a sidebar ensued. Defense counsel then turned to Rosenfeld’s next meeting with the government. A question regarding whom Rosenfeld met with led to a second objection from the prosecution and another lengthy sidebar. After the sidebar, Judge Kiyo Matsumoto dismissed the jurors for the day. She ordered sealed briefing from the parties on what she described as “potentially career-ending allegations” made by the defense. The parties will brief the matter, addressing among other issues, whether any statements made by government officials outside the courtroom constitute party admissions.

The Take-Home

The Court will rule on the admissibility of the Rosenfeld’s testimony regarding his second meeting with government officials.  Whether the allegations raised at sidebar have a more significant impact on the trial, or on any officials’ careers, remains to be seen. 

What Happens Next?

The trial, which has lasted for more than two months, will proceed on December 14, 2017.