In connection with his federal securities fraud sentencing in 2018, so-called Pharma Bro Martin Shkreli forfeited to the government his one-of-a-kind Wu-Tang Clan album, “Once Upon a Time in Shaolin.” A cryptocurrency collective subsequently bought it but then sued Shkreli, claiming that the former pharmaceutical executive had improperly retained copies of the data and files at the time of the forfeiture and had released or intended to release them publicly.
While litigation continues over the unusual matter, a federal judge has given Shkreli, who left prison in 2022, until Friday to “sequester and turn over all of his copies, in any form, of the Album or its contents to defense counsel” and to file an affidavit swearing under penalty of perjury that he has done so and that he no longer possesses any copies, in any form, of the album or its contents. U.S. District Judge Pamela Chen’s preliminary injunction order on Monday further requires his counsel to file a letter by Friday certifying that they’ve taken possession of the album copies and contents.
The judge also ordered Shkreli to file, by Sept. 30, an inventory and account in the form of an affidavit, under penalty of perjury, that includes: the nature and volume of the copies of the album’s data and files that he retained; the names and contact information of anyone to whom he distributed the data and files; when and how he distributed them; and the amounts, source, date and nature of any financial benefits he received from his distribution or playing of the album or its contents.
After hearing legal arguments from the parties, Chen, sitting in the Eastern District of New York, said that a preliminary injunction was in the public interest and that the plaintiff had raised sufficiently serious questions about Shkreli’s possible violation of the Defend Trade Secrets Act, misappropriation of trade secrets and unjust enrichment.
Shrekli’s lawyers had argued that the plaintiff couldn’t show sufficient harm to warrant an injunction. They wrote in a filing last month that the government
sold the copy to an unidentified purchaser, who re-sold it to Plaintiff. But, before the forfeiture happened, when Defendant was the uncontested owner of the copy, and the uncontested 50% owner of the copyrights, he made copies as we [sic] was permitted to do so under his original purchase agreement with the original sellers of the work. Neither those copies, nor Defendant’s copyrights, were forfeited by the Forfeiture order, and Defendant continues to have the right to use them to this day.
The judge further warned Shkreli that any violation of her order can be prosecuted as contempt of court. So the level of his compliance will determine whether there are further legal twists to this saga — which has already been strange enough.
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