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Shkreli's convicted lawyer wants DOJ's hands off firm retirement funds

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A view of the United States District Court for the Southern District of New York. REUTERS/Chip East

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  • 2nd Circuit hears bid from Evan Greebel, ex-Katten Muchin partner, to shield retirement accounts
  • Prosecutors won garnishment ruling last year in Brooklyn federal court
  • Greebel owes more than $10 million to victims

(Reuters) – An attorney for convicted former law partner Evan Greebel urged a U.S. appeals court on Thursday to block federal prosecutors from taking his client’s retirement account funds to help pay more than $10.4 million owed to victims of a fraud scheme involving ex-pharma executive Martin Shkreli.

The 2nd U.S. Circuit Court of Appeals in New York weighed Greebel’s contention that retirement accounts associated with his work at Katten Muchin Rosenman, where he had been a partner until 2015, and Fried, Frank, Harris, Shriver & Jacobson should be off-limits from the government.

A jury found Greebel guilty in 2017 in a conspiracy with Shkreli to dupe investors in his company Retrophin Inc. Greebel was then a partner at Katten Muchin and served as outside counsel to Retrophin. He was sentenced to 18 months in prison for helping Shkreli, and sentenced to seven years for related charges.

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Greebel’s lawyer, Reed Brodsky of Gibson, Dunn & Crutcher, argued his client doesn’t meet plan requirements to immediately withdraw the funds to pay for the victims’ restitution. He also said that even if the government could reach the accounts, there’s a 25% garnishment cap based on the federal Consumer Credit Protection Act.

Assistant U.S. Attorney Thomas Price argued that the federal Mandatory Victims Restitution Act, which guides how crime victims are repaid, is controlling, not the consumer credit law. Circuit Judges Myrna Perez, Richard Wesley and Joseph Bianco appeared torn over where to draw lines in the case.

A representative from the Brooklyn U.S. attorney’s office declined to comment.

Prosecutors have argued Greebel is not an “honest debtor” subject to the consumer credit protection law but instead “a convicted criminal who owes over $10 million dollars to his victims.”

U.S. District Judge Kiyo Matsumoto in April 2021 called Greebel’s objections “without merit.” The value of retirement plans was identified in her ruling at nearly $1 million.

In an email to Reuters, Brodsky said the 2nd Circuit’s decision involving the extent of the prosecutors’ reach into Greebel’s accounts will be “an issue of first impression near and dear to the hearts of everyone with retirement earnings, that is, imposing statutory limits on the government’s ability to eviscerate an individual’s retirement funds.”

Greebel’s “entire future safety net for him and his family is at stake,” Brodsky told the court.

The case is United States v. Greebel, 2nd U.S. Circuit Court of Appeals, No. 21-993.

For the U.S.: Thomas Price of the U.S. Attorney’s Office for the Eastern District of New York

For Greebel: Reed Brodsky of Gibson, Dunn & Crutcher

Read more:

Martin Shkreli’s law firm has not been paid, seeks to withdraw

Ex-lawyer of pharma executive Shkreli gets 18 months prison for fraud scheme

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