June 18, 2018

Egad, Pharma Bro Martin Shkreli Was an Insufferable Client

Martin_Shkreli_Citrin-Cooperman-featured

Everyone who works in public accounting experiences a bad client or two. But then again, there are bad clients, and then there are the Martin Shkrelis of the world. It’s really a disservice to the bad clients out there to lump Martin Shkreli in with them.

This CNBC report details the testimony of Corey Massella, who was a partner at Citrin Cooperman, the firm helping Shkreli’s company, Retrophin, get ready to go public. Shkreli is currently on trial for securities charges. According to Massella, Shkreli’s business is the stuff clients from hell are made of. Highlights include:

  • Retrophin’s accounting described as “very chaotic.”
  • Shkreli repeatedly sending “changes in the stock ownership tables,” that caused an exasperated Massella to write “WTF?” in an email.
  • Shkreli getting testy over Citrin Cooperman’s questions about contractors and their requests for Retrophin’s agreements with them.
  • Numerous head-scratching debit card transactions for “iTunes, Starbucks and travel expenses.”
  • Compensation payments to Shkreli that didn’t run through payroll, including “a $575,000 transfer from Retrophin to Shkreli’s personal bank account” that was explained as “back pay and ‘bonus pay.'”

Then there’s this doozy:

[A] year after beginning work for Retrophin, Massella said, his accounting firm flagged a $4,130 expense to Retrophin paid to the Borgata hotel in Atlantic City, New Jersey.

When Shkreli was asked about it, Massella said, he replied, “Martin’s trip to Atlantic City.”

When the accountants asked Shkreli the purpose of the trip, he replied, ‘No business, Shkreli to refund to company,’ ” Massella said.

The final straw for Citrin Cooperman wasn’t another brazen transaction or ambiguous justification, but seems to be Shkreli’s sister’s email decorum:

Joel Cooperman, managing partner at Citrin Cooperman, in his email resigning the firm’s work for Retrophin, blasted Shklreli’s sister for her “outrageous and rude” email to one accountant, according to testimony Monday.

Of all the indignities that accountants have to suffer, you’d think dealing with rude emails would be pretty small potatoes. Although it does make for a fine capstone to putting up with a bunch of shady behavior.

[CNBC]

Correction: An earlier version of this post erroneously stated that Citrin Cooperman was the auditor of Retrophin.

Image: Wikimedia Commons

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Reno’s “Hot August Nights” Goes For-Profit and Skips Town?

Though the connection between the non-profit Hot August Nights organization that’s been putting on Reno’s biggest party for 24 years and the newly-registered for-profit Hot August Nights of Las Vegas is unclear, what is clear is that part of the event will be held in Long Beach this year due to “horrific” costs to put the event on in Reno.

Reno, if you don’t already know, is in pretty bad shape. I used to live there so I know that it always was but it’s in really bad shape right now. With the iconic Fitzgerald’s Hotel and Casino indefinitely boarded up directly under Reno’s “Biggest Little City in the World” sign as a direct result of the Corus Bank failure 1,500 miles away in Chicago back in late 2009, downtown looks more destitute than ever. I take full artistic license for use of the word “iconic.” This is Reno we’re talking about.


You’d think Reno city commissioners would want to encourage fun and leisure, mostly through the only event any of us with the big money to the West are familiar with (Hot August Nights) but all signs point to the city losing it.

On the same day paperwork was filed in Nevada to establish the for-profit, non-profit Hot August Nights officials announced part of the event would be held in Southern California in 2011.

There’s been a bunch of bitchfighting in Reno (and neighbor Sparks, who gets some of the tourism run-off for the event) and it continues.

We don’t expect you to be familiar with the Reno area (unless you happen to work for Deloitte or E&Y in town, though we don’t like those odds) so for a little background on Hot August Nights, it’s a yearly car show stamped as family fun for everyone. The event costs $700,000 to put on each year according to organizers who swear they aren’t looking to move the show to Long Beach in 2012.

The Reno Gazette-Journal breaks down the non-profit side:

In the 2004 tax year, Don Schmid, then listed as executive director, was paid $93,962 in salary.

On the nonprofit corporation’s 2008 income tax return, current executive director Bruce Walter is listed as collecting $256,890 in salary and $11,940 for a housing allowance, resulting in total compensation of $268,830.

Yes, I’m sure it’s the costs of putting on the event that are inspiring a move. Anyone been to a convention in Reno lately? It’s got to be the cheapest place in the country if you don’t count middle states. You’re telling me it’s cheaper to host the event in Long Beach?

For-profit Hot August Nights corporation created in Vegas [The Reno Gazette-Journal]