Martin Shkreli, the CEO of Turing Pharmaceuticals, has denied all charges brought against him by the government, which includes allegations that his hedge fund and biotech company was used like a “Ponzi scheme.” The 32-year-old entrepreneur was arrested in New York, US, on Thursday on charges of fraud and has been freed on a US$5 million (approx. AU$7.01 million) bond.

“Shkreli essentially ran his company like a Ponzi scheme where he used each subsequent company to pay off defrauded investors from the prior company,” Brooklyn US Attorney Robert Capers said at a press conference.

Shkreli had stormed up controversy after he increased the price of a life-saving drug by more than 5,500 per cent in September. He has recently been embroiled in a number of controversies around his controversial remarks in the press as well as online.

The Federal Bureau of Investigation arrested Shkreli at 6:30 a.m. on Thursday and made him walk past the paparazzi outside the FBI headquarters.

Shkreli’s arrest, however, has nothing to with the unprecedented hike in the price of Daraprim, a drug which is used to treat malaria and infections in HIV positive people. According to the FBI, his arrest was instead due to a case of embezzlement of US$11 million (approx. AU$15.5 million) in another company called Retrophin which he once led.

"As alleged, Martin Shkreli engaged in multiple schemes to ensnare investors through a web of lies and deceit," the AFP quoted Capers as saying. "His plots were matched only by efforts to conceal the fraud, which led him to operate his companies, including a publicly traded company, as a Ponzi scheme, where he used the assets of the new entity to pay off debts from the old entity."

Evan Greebel, a lawyer in New York, was arrested and charged for helping Shkreli. However, like Shkreli, he also pleaded not guilty and was freed on a US$5 million bond. Both the men and their lawyers declined to comment after their court appearance.

Shkreli later posted a brief statement expressing gratitude to be back home. “Glad to be home. Thanks for the support,” he wrote on Twitter.

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