The federal indictment against Martin Shkreli suggests a lot of things about the reviled 32-year-old CEO. Chief among them: He was great at convincing people to give him money, but not very good at investing it. And when it came time to pay people back, he repeatedly plundered his company to cover the losses.

Shkreli was arrested in his midtown Manhattan home early Thursday morning and perp walked before a crowd of photographers in a cozy-looking hoodie on his way to jail. Also arrested was Evan L. Greebel, a corporate attorney who served as outside counsel to Retrophil, one of the companies at the heart of the alleged fraud.

According to prosecutors, Shkreli tried his hand at investing several times over, all to disastrous results.

Between 2006 and 2007, authorities say, Shkreli had lost all the money that had been invested in his first hedge fund, Elea Capital Management, resulting a $2.3 million dollar default judgement to Lehman Brothers.

That information was omitted from investor pitches when Shkreli started his second hedge fund, MSMB Capital, in 2009. In emails, the US Attorneys Office alleges, Shkreli told potential investors the fund was liquid and monitored by independent CPAs. Neither of these assertions were true.

In the meantime, he kept raising money, telling a potential investor in November 2010 that the fund had assets worth $35 million.

“In fact,” the indictment alleges, “the value of assets in MSMB Capital’s bank and brokerage accounts totaled approximately $700.”

By February of 2011, the fund—which at its peak held about $3 million—had been depleted. Most of the money was lost in a February 2011 short sale of Orexigen Therapeutics (OREX). Shkreli, who failed to obtain enough shares to support the sale, lost around $7 million. Over the course of the fund’s lifetime, Shkreli also withdrew about $200,000, which he apparently used for personal expenditures.

Despite sending out regular updates declaring gains, the depleted MSMB Capital fund never traded again.

In the meantime, Shkreli began soliciting investors for a second fund, MSMB Healthcare. He managed to raise as much as $6 million, though he told potential investors the fund had $55 million in assets. That fund too, ended badly, in part because Shkreli allegedly used the money to pay off the debts he’d racked up with the first fund.

That’s where Shkreli’s pharmaceutical company, Retrophin, came in, authorities say. Through a series of backdated agreements, he converted a $900,000 equity investment MSMB had made in Retrophin into a loan, which he forced Retrophin to repay. Authorities say he used that money to pay off the debt he racked up with his disastrous OREX short sale.

But he still owed more money to the MSMB Capital and MSMB Healthcare investors. According to prosecutors, Shkreli made a series of fake investments into Retrophin to cover the losses, recording them on Retrophin’s capitalization table even though MSMB had never invested money in the company. These fradulent documents were signed off on by Greebel, who served as outside counsel to Retrophin.

After a November, 2012 inquiry from the SEC, Shkreli and Greebel decided to bolster the fake investments with backdated transfers with the help of three employees referred to in the indictment as “Co-Conspirator 1,” “Corrupt Employee 1,” and “Corrupt Employee 2”.

Emails sent during this period appear to support the government’s theory. In one email, the indictment alleges, Shkreli advised an employee that an agreement signed in November had actually been “signed in June.” The employee initially sent back a clearly redacted copy that had June written by hand over the redacted date. The indictment notes an accountant copied on the email read it and “exclaimed, ‘WT...F.’” The final copy of the agreement had a new cover page with the June date typed and no redactions.

When an external auditor found out what was going on, Shkreli and Greebel decided to pretend to make it right by promising MSMB would pay the money back. “The current thinking is let rtrx [Retrophin] pay, get a note from the fund and if the fund cant fulfill the note rtrx will write it off as bad debt,” Greebel advised in an email to Shkreli. “[On] current thinking: that works for me,” Shrekli responded.



But there were still investors waiting to be paid. In one case, Shkreli suggested using Retrophin’s money and disguising the $100,000 payments as a settlement. In emails, Greebel advised Shkreli that would attract undue attention from auditors and suggested Shkreli instead list the investors as consultants on Retrophin’s payroll. “Why does it need to be a consulting agreement??! Have you heard of the term settlement?” Shkreli wrote Greebel. “We can call it a settlement agreement, but given [the auditor’s] recent behavior, they may require it to be disclosed in the financials. I was trying to prevent that issue,” Greebel wrote back.

In all, the government says, Retrophin paid out at least $7.6 million in claims and compensation the company was never responsible for.

Retrophin filed a civil suit against Shkreli in August alleging many of the same clains and according to Newsweek, he’s known he was the subject of a criminal investigation since at least January. And that was all before he purchased a lifesaving drug for AIDS patients and jacked up the price by 4,000 percent. What a surprise this guy turned out to be an asshole.

You can read the entire indictment here: