NEW YORK • Former pharmaceutical executive Martin Shkreli's prized Wu-Tang Clan album might end up on a government auction block.
A judge on Monday authorised the federal government to seize rare Wu-Tang Clan and Lil Wayne albums owned by Shkreli (left), who has been convicted of fraud, if he cannot come up with the US$7.36 million (S$9.7 million) he owes the government.
Judge Kiyo Matsumoto of the United States District Court in Brooklyn ruled on Monday that Shkreli owes the money to pay back what he made from his fraud.
His lawyers had argued that he owed nothing.
Judge Matsumoto also authorised the government to seize Shkreli's assets, including his one-of-a-kind Wu-Tang Clan album, Once Upon A Time In Shaolin, for which he reportedly spent more than US$1 million; a Lil Wayne album, Tha Carter V; a Picasso painting; his shares in Vyera Pharmaceuticals; and US$5 million in an E-Trade account securing Shkreli's bond, which makes up "the majority of Mr Shkreli's liquid assets", according to a court filing by his lawyers.
The government is allowed to access the other property because it showed that Shkreli had "transferred", "substantially diminished" or "commingled" the direct proceeds of his fraud, judge Matsumoto wrote.
Shkreli is perhaps best known for hiking the price of Daraprim, a drug treating a rare disease, by 5,000 per cent overnight when he ran a pharmaceutical company.
Since then, he has become notorious for attention-seeking antics that he publicised online, including the purchase of the Wu-Tang Clan album.
Last summer, he was charged with defrauding investors when he ran hedge funds and a different pharmaceutical company early in his career. Jurors found him guilty of three of eight counts of fraud after a five-week trial.
He initially avoided prison, staying out on bail. But less than a month after his conviction, judge Matsumoto ordered him jailed after he offered his social-media followers US$5,000 if they could "grab a hair" from former presidential candidate Hillary Clinton during her book tour.
Since then, he has been held at the Metropolitan Detention Center in Brooklyn.
He is scheduled to be sentenced on Friday.
His lawyer, Mr Benjamin Brafman, said in court filings that Shkreli had already seen at least one of his items seized by the government. The tax authorities in New York took, and auctioned off, his Enigma code-breaking machine.
If Shkreli's assets are seized by the government, the US attorney-general can dispose of them, potentially by auctioning them off.