Martin Shkreli was released on a $5million bond after being arraigned on charges of securities fraud in federal court in Brooklyn Thursday afternoon.

Shkreli, the son of immigrants, was also forced to forfeit his passport.

The price-hiking pharmaceutical entrepreneur was picked up by the FBI in the early hours of Thursday following an investigation into a former hedge fund and drug company he previously headed.

It is alleged he illegally used stock from the biotechnology firm Retrophin Inc. to pay off debts related to his struggling hedge fund and to pay back angry investors.

He is being charged with seven counts of fraud for running what United States Attorney Robert L. Capers of the Eastern District of New York is calling a Ponzi scheme.

Shkreli, 32, pleaded not guilty to these allegations.

He faces a maximum sentence of 20 years in prison if convicted on all charges.

Scroll down for videos

Free: Martin Shkreli was released on a $5million bond Thursday afternoon

Scrum: He was seen being mobbed as he left the federal courthouse in Brooklyn

Outfit change: He was wearing a button-down shirt and sunglasses for his court appearance

Moving forward: Shkreli visibly breathed a sigh of relief after he pleading not guilty to financial fraud charges that could see him jailed

Art: A courtroom sketch shows defendants Shkreli (C) and Greebel (R) a former partner at law firm Katten Muchin Rosenman (R) during their arraignment

Shkreli visibly breathed a sigh of relief after he pleading not guilty to financial fraud charges that could see him jailed.

The alleged financial fraudster smiled and looked at ease when Magistrate Judge Robert Levy said he could walk free so long as he complied with a list of conditions.

The bond was signed by two men, one of whom was Shkreli's father Pashko, 61, an Albanian immigrant who had worked janitorial jobs to raise up his son in working class Brooklyn.

During the 15 minute hearing at Brooklyn's Federal Court Shkreli wore a black t-shirt, blue jeans and black sneakers.

He stood facing the judge with his hands held in front of him and repeatedly stretched his head back to face the ceiling.

He spoke to tell the court his name and answered: 'Yes, your honor' when asked if he understood the charges.

The court heard that Shkreli's family are in the process of setting up an account which will have the $5million in it.

Judge Levy told Shkreli that under the terms of his bail he cannot leave the New York area, has to surrender his passport and cannot have contact with former executives at Retrophin, the biotech firm where he used to be chief executive.

The company's former lawyer, Evan Greebel, denied the allegations against him and was freed on a $1million bond under similar conditions.

The next hearing for both men will be January the 20th.

Shkreli left court wearing sunglasses and a black button-down shirt, refusing to comment on the charges.

He was flanked by a large security guard and his father who pushed photographers out of the way as they walked to a waiting SUV.

During the chaotic scene, the security guard crushed the umbrella of one photographer as he moved him aside and pushed his way through the crowd.

Trouble: Shkreli, 32, was arrested on charges of securities fraud Thursday

Rushed: During the chaotic scene, the security guard crushed the umbrella of one photographer as he moved him aside and pushed his way through the crowd

Farewell: He was picked up in the early morning hours of Thursday at his apartment building in New York City (above)

Safety first: A federal officials buckles Shkreli's seat belt for him in the back of their car

Breaking it down: Officials walk behind a poster board detailing Martin Shkreli's scheme after a news conference in New York

Style: Shkreli was wearing a gray-hooded sweatshirt and jeans

A press conference was held Thursday during which the details of Shkreli's activities were revealed in greater detail.

'Martin Shkreli engaged in multiple schemes to ensnare investors through a web of lies and deceit,' wrote Capers in a press release.

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 of the old entity. -United States Attorney Robert L. Capers of the Eastern District of New York

'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 of the old entity.

'When regulators and auditors questioned Shkreli's decisions, he joined forces with Evan Greebel, who used his law license and training to conceal and further the scheme.'

Shkreli is charged with securities fraud, securities fraud conspiracy, and wire fraud conspiracy for orchestrating three interrelated schemes: schemes to defraud investors in MSMB Capital and MSMB Healthcare and a scheme to misappropriate Retrophin’s assets.

Greebel is charged with wire fraud conspiracy for his role in the Retrophin scheme.

Caper's release goes on to say; 'The charges announced today describe a securities fraud trifecta of lies, deceit, and greed. As charged, Martin Shkreli targeted investors and retained their business by making several misrepresentations and omissions about key facts of the funds he managed.

'He continued to lie about the success of the investments and used assets from Retrophin to payoff MSMB investors.

'In the end, Shkreli and Greebel used a series of settlement and sham consulting agreements that resulted in Retrophin and its investors suffering a loss in excess of $11million.'

Not smiling: He was seen being led away from FBI headquarters on Thursday in handcuffs

Also in trouble: Shkreli's attorney Evan Greebel was also seen being led out on Thursday

Nowhere to turn: Shkreli had previously denied accusations made against him by Retrophin

New friends: FBI agents were on hand to escort him out of the building

Blame it on the rain: Shkreli covered his head with his hood as it was sprinkling outside

Bloomberg Business was the first to on Shkreli's arrest early.

The allegations say that since he was at least 26, Shkreli, who is now 32, has been engaged in repeated and sustained financial fraud.

It allegedly began in 2009 when he set up hedge fund MSMB Capital but failed to tell prospective investors that he had lost all the money from his previous hedge fund, Elea Capital.

Lehman Brothers had a $2.3 million default judgement against Elea but he did not disclose this, it is alleged.

When MSMB Capital was up and running Shkreli allegedly lost all the

$700,000 that investors had put in through a series of bad deals.

He also ended up owing Merill Lynch $7 million after one disastrous trade.

By December the following year he had just $700 in the fund but told prospective investors he had $35 million in assets under his control and promised them what Mr Capers described as 'handsome returns'.

Some 13 investors handed over another $5 million and Shkreli used it to set up MSMB Healthcare, another hedge fund which was supposed to invest in healthcare.

Justice: US Attorney Robert Capers speaks during press conference in New York on Thursday

Digs: Shkreli's New York City apartment where he was picked up by police on Thursday

Protesters outside Shkreli's office in October against his decision to hike the price of an Aids drug from $13.50 to $750

Shkreli is accused of using this money to pay off his debts from MSMB Capital and paying excessive management fees to himself.

Shkreli bought biotech company Retrophin in 2012 but by this point investors from MSMB Healthcare and MSMB Capital wanted their money back.

Mr Capers said that 'at some point your lies catch up with you and you face a crossroads' - but Shkreli continued down a path of deceit.

He used sham consulting agreements from Retrophin, forged backdated transactions and made secret payoffs from the company worth a combined total of $7.6 million to pay off his debts, it is claimed.

Mr Capers said that Shkreli used the company as his 'personal piggy bank' and that when he was confronted by internal auditors he ignored their warnings.

Mr Capers said the indictment showed the 'brazenness and breadth' of the crimes that Shkreli had carried out.

Mr Capers would not speculate on whether or not Shkreli raised the price of HIV drug Daraprim 55 times to raise money to pay off investors who wanted their money back.

Mr Capers also would not comment on whether or not prosecutors had seized the sole copy of the new Wu-Tang Clan album, which Shkreli paid$2 million for.

He said: 'We're not aware of where he got the funds for the Wu-Tang clan album.'

Investment: It was recently revealed that Shkreli was the secret buyer of Wu-Tang Clan's Once Upon A Time In Shaolin (above)

Courting controversy: Shkreli has gleefully taken on his detractors on social media including in this Twitter post from Washington DC last month in which he states: 'If any politicians want to start, come at me'

Humblebrag: Shkreli also enjoys sharing photos of himself on social media showing what a cool life he has (left with Fetty Wap; right at the beach)

Shkreli, who is currently the founder and chief executive of Turing Pharmaceuticals and KaloBios Pharmaceuticals Inc., became reviled by members of the public and the medical community earlier this year after his decision to raise the price of a 62-year-old drug used for treating AIDS and cancer patients from $13.50 per tablet to $750 overnight.

Shares of KaloBios Pharmaceuticals Inc. were down 50 percent Thursday in early trading.

In an interview with Bloomberg Business at the time Retrophin filed the suit, Shkreli called it 'baseless and meritless' before adding; 'We’re going to win. They still owe me a substantial amount of money.'

Shkreli purchased the rights to the drug Daraprim - which is used to treat life-threatening parasitic infections - in August for $55million, and shortly thereafter, the price of the drug, which costs roughly $1 to produce and is used by many Aids and cancer patients, was increased to $750 per tablet.

This move earned him the label of 'the most hated man in America.'

Since then he has seemed to gleefully court controversy over his decision, attacking his critics on social media, including presidential candidate Hillary Clinton.

When Clinton called Shkreli's price hike 'indefensible,' he replied to her on Twitter with 'lol.'

Then, on November 3, he tweeted a photo of himself in the nation's capital, writing; 'In DC. If any politicians want to start, come at me.'

It was also recently revealed that he was the secret buyer of Wu-Tang Clan's Once Upon A Time In Shaolin.

Only one copy of the album was made, which was sold last May for $2million after the rap group agreed to release it to the highest bidder.

Then, in an interview with HipHopDx just one day before his arrest, Shkreli said; 'I’m not going to play it for no reason.'

He later amended that comment to say; 'If Taylor Swift wants to come over and suck my d***, I’ll play it for her.'

In that same interview he revealed that he was planning to put up $2million to bail out jailed Brooklyn rapper Bobby Shmurda.

Martin Shkreli’s father, Pashko Shkreli, refused to comment when contacted at his Brooklyn home by DailyMail.com.

Shkreli business partner, Marek Biestek, who started the MSMB Capital Management hedge fund with Shkreli in 2008, said on Thursday that he would not be commenting at this time on advice from his lawyer.

Mr Biestek’s LinkedIn profile lists him as the owner of Yorkville Capital Management fund. The company could not be reached for comment on Thursday.

A woman who answered the phone at Greebel’s Scarsdale home where he lives with his wife Jodi, said: ‘This is not a good time, thanks.’