Martin Shkreli ran his companies "like a Ponzi scheme", according to US Attorney Robert Capers.
The pharmaceuticals tycoon has been arrested on fraud charges.
The 32-year-old previously caused outrage by raising the price of life-saving HIV-related drugs from $13.50 to $750 (£9.09 to £504.24).
At first, he said he would lower the price of Daraprim, but later changed his mind.
When Hillary Clinton tweeted that a 10 per cent price reduction was not enough, he responded with one word: "lol".
He is charged with illegal taking stock from Retrophin Inc., a biotechnology firm he started in 2011, and using it to pay off debts from unrelated business dealings.
"As alleged in the indictment, Shkreli essentially ran his companies like a Ponzi scheme, where he used each subsequent company to pay off the defrauded investors in the prior company," US Attorney Robert Capers said.
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