Shkreli’s Wu-Tang Album Could Be Seized by Government

NEW YORK — Martin Shkreli’s prized Wu-Tang Clan album might end up on a government auction block.

A judge Monday authorized the federal government to seize rare Wu-Tang and Lil Wayne albums owned by Shkreli, the former pharmaceutical executive convicted of fraud, if he can’t come up with the $7.36 million he owes the government.

Judge Kiyo A. Matsumoto of U.S. District Court in Brooklyn ruled Monday that Shkreli owes the money to pay back what he made from his fraud.

Shkreli’s lawyers had argued that he owed nothing.

Matsumoto also authorized the government to seize Shkreli’s assets, including his one-of-a-kind Wu-Tang album, “Once Upon a Time in Shaolin,” for which he reportedly spent more than $1 million; a Lil Wayne album, “Tha Carter V”; a Picasso painting; his shares in Vyera Pharmaceuticals; and $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 Shkreli’s 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, Matsumoto wrote.

Shkreli is perhaps best known for hiking the price of Daraprim, a drug treating a rare disease, by 5,000 percent overnight when he ran a pharmaceutical company. Since then, he has become notorious for attention-seeking antics that he publicized online, including the purchase of the Wu-Tang 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.

Shkreli initially avoided prison, staying out on bail. But less than a month after his conviction, Matsumoto ordered him jailed after he offered his social-media followers $5,000 if they could “grab a hair” from Hillary Clinton during her book tour. Since then, he has been held at the Metropolitan Detention Center in Brooklyn.

Shkreli is scheduled to be sentenced Friday.

His lawyer, Benjamin Brafman, said in court filings that Shkreli had already seen at least one of his items seized by the government: Tax authorities in New York took, and auctioned off, his Enigma code-breaking machine.

If Shkreli’s assets are seized by the government, the U.S. attorney general can dispose of them, potentially by auctioning them off.