The suit claims that Shkreli, who remains on probation in his criminal case, allegedly kept copies of the hip-hop album after it was sold and played it online as recently as Sunday, in violation of his forfeiture order .
A spokesperson for the Brooklyn U.S. Attorney’s Office told CNBC “no comment” on Wednesday when asked whether prosecutors were taking action against Shkreli in response to claims in the civil lawsuit filed by PleasrDAO-based company in the Cayman Islands.
Chen, in his order Tuesday, wrote that PleasrDAO “is likely to succeed on the merits” of the complaint, “or raise very serious questions regarding the propriety of the confiscation order, violations of the Trade Secret Defense Act” and “Misuse of Trade Secrets.”
The judge also scheduled a June 25 hearing in that case, during which she could uphold 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 that he could not say whether he had been in contact with prosecutors about Shkreli’s alleged violation of his forfeiture order.
“I wouldn’t be surprised, given this activity, if prosecutors or the probation office are interested in this case,” Cooper told CNBC.
The lawyer said his client sued Shkreli because “his conduct had significantly accelerated” and because PleasrDAO planned to play some songs from the album at a museum exhibition in Tasmania, Australia, in from the end of the week.
The suit says that on Sunday, Shkreli wrote a message on his social media account on Spaces now.”
Less than an hour later, Shkreli’s
“During the Spaces session, Shkreli played music from the album that any participant could hear. According to X, 4.9 thousand listeners tuned in,” the suit states.
Cooper said: “His misconduct has been going on for a very long time and much of it was directed at my client.
“”The fact that he kept copies (of the album) was a violation of his forfeiture, and there could be consequences beyond 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 he misled investors about the performance of two hedge funds he ran and conspired to fraudulently manipulate the shares of a pharmaceutical company he had founded.
Before his conviction, Shkreli rose to national prominence in 2015 for raising the price of the life-saving drug Daraprim by more than 4,000 percent overnight at another pharmaceutical company he headed.
In January, a federal appeals court upheld Shkreli’s lifetime ban from working in the pharmaceutical industry, as well as an order to pay more than $64 million in disgorged profits for blocking competition from Daraprim.
Shkreli was released from prison in May 2022 and is currently serving a three-year sentence on supervised release.
As part of his criminal conviction, Shkreli was ordered to forfeit nearly $7.4 million to the U.S. government and return a package of assets to satisfy that order.
The assets included “Once Upon a Time in Shaolin,” Lil Wayne’s album “Tha Carter V,” a papercut by Pablo Picasso and $5 million held in an E-Trade brokerage account.
Shkreli purchased the Wu-Tang Clan album in 2015 for $2 million, setting a Guinness World Record for the most expensive work of music ever sold. Wu-Tang Clan’s 31-track, two-disc album was presented in a hand-carved box set with a nickel and silver case, which itself was 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 publicly unidentified buyer. At the time of the sale, Shkreli owed nearly $2.4 million under 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, according to the suit, was for “the copyright and exclusive right to exploit the recordings.”
PleasrDAO’s suit describes the company as “an international entity that collects and publicly displays culturally significant media and materials with the goal of creating ecosystem experiences that encourage participation and interaction in the United States and other country “.
The lawsuit states that Wu-Tang Clan’s “album was intended to constitute the only existing copy of the disc, music, data and files, and packaging.”
“It now appears, however, that Shkreli improperly retained copies of the data and files at the time of confiscation and that he made them public and/or intends to make them public,” the suit states. .
“Such actions would cause PleasrDAO significant and irreparable monetary harm, and would give rise to numerous claims for relief under the forfeiture order and the common law,” the suit states.
The lawsuit notes that when Shkreli purchased the album in September 2015, he and the album’s producers signed an agreement that prohibited Shkreli for 88 years from duplicating or exploiting the album “for any reason other than ” exhibition or reading » » in spaces that are not normally used. used as a hall for large concerts.
The complaint also cites the forfeiture order imposed in the criminal case against Shkreli, which prohibits him from any act that would diminish, damage or dissipate the property he surrendered and from any act that would affect the availability or the value of these goods.
PleasrDAO said in the lawsuit that during live broadcasts to his followers on social media platforms beginning in June 2022, a month after his release from prison, Shkreli admitted to performing “Once Upon a Time in Shaolin” at the subscribers of these feeds.
“On June 22, 2022, during another YouTube live stream, Shkreli was asked if he still had a copy of Once Upon a Time in Shaolin. Shkreli responded, “Yes, I was playing it on YouTube the other night, even though someone paid $4 million for it,” according to the complaint.
Last month, the suit alleged that “Shkreli appeared on a podcast recorded on YouTube.”
“In the video, Shkreli said he ‘burned the album and sent it to 50 different girls…’ He then asked the interviewer, ‘Do you know how much (expletive) this album reported to me? You think I didn’t make a fucking copy? Are you kidding?” the suit says. “He also stated that ‘thousands of people listened to him. I sent the mp3s to all these people.”