FEBRUARY 14, 2007
Princeton, New Jersey
As a hail-and-snow storm pelted the Princeton area, elaborate Valentine’s Day floral bouquets arrived for employees that morning at Ranbaxy’s U.S. corporate headquarters. Then, around 9:30 a.m., chaos erupted as federal agents, led by Debbie Robertson, swarmed the reception area. Vincent Fabiano, the vice president of global licensing, was in his office when a man he had never seen before walked in and told him, “Step away from your desk.”
“Who the hell are you?” Fabiano asked.
“I’m an FDA criminal investigator,” the man responded. Fabiano noticed the gun on the man’s hip and stepped away from his desk as directed.
On the second floor, an employee heard a voice boom behind her: “Don’t touch your computer. Don’t touch your phone. Step away from your desk.” Her first thought was that there was a bomb threat. She turned around to see FDA criminal investigators in bulletproof vests, guns strapped to their waists, surging across the floor, along with local New Jersey police.
Panic spread as the building was surrounded by police cars. “People were freaking out, crying,” a former employee recalled. “They took every computer. There were people with guns.” Employees dove under desks, not sure whether the action was an immigration raid or something else. The agents were carrying out boxes of documents and herded employees to a conference room, where they began interviewing each one: they asked about their citizenship, how long they’d worked for the company, even their height and weight. No one could use the bathroom without being escorted by a federal agent.
Jay Deshmukh, the company attorney, who was out of the office that morning, got a panicked call from his assistant, begging him to come. Deshmukh arrived to a scene of bedlam, with federal agents lugging out computers and interrogating staff. He dove in, trying to get the agents to stop interviewing employees.
Even as Deshmukh tried to restore calm, he didn’t feel at all composed, especially after he studied the search warrant. Federal prosecutors seemed to be looking for a world of incriminating material. As the news ricocheted from New Jersey to New Delhi, Ranbaxy issued a statement: “This action has come as a surprise. The company is not aware of any wrongdoing. It is cooperating fully with the officials.”
By late afternoon, traumatized employees were finally escorted from the building, past piles of drooping flowers in the reception area, which smelled like a funeral parlor. They would later call it the “Great Valentine’s Day Raid.” It lasted so long that the FDA agents who participated called it the “Valentine’s Day Massacre.” It killed their evening plans.
Federal agents emerged from the raid with around five terabytes of data—about half the contents of the print collection of the Library of Congress, they estimated. But even amid this avalanche of records, one document in particular stood out. It was the company’s own secret report on its Sotret formulation problems that Abha Pant had filed away. Investigators found it in her office with the cover page that read in bold letters, “Do Not Give to FDA.” The document made clear that the company’s defense of its Sotret drug at the FDA meeting two and a half months earlier—and its claim that regulators had tested it improperly, thus getting a bad result—had been a bald-faced lie. The company knew its drug was failing. It had known for years.
Thakur was in India during the raid, celebrating Mohavi’s first birthday. It should have been a peaceful family time, but the raid devoured his attention. Former colleagues were contacting him to explain what was happening inside the company. He’d told no one about his role in the search warrant. Ten days later, in late February, he learned what he feared most: Malvinder Singh and board chairman Tejendra Khanna had apparently held a meeting with top company executives in which they reviewed a list of people who might have given the FDA the information that had led to the raid. Thakur’s name was on it. So was that of his former boss, Raj Kumar.
What if the company tried to harm him or his family? What if something happened when he was away in the United States? He shared his fears with Robertson, who got him the name and direct contact information for the regional security officer stationed at the U.S. embassy in New Delhi. He mentioned to Sonal, as though in passing, that the FDA was reaching out to former employees and had also reached out to him. If she encountered any trouble, there was someone at the embassy who could help.
Sonal felt increasingly ill at ease. A pall hung over the family: their money worries, her husband’s preoccupation, his long absences in the United States, living in a freestanding home with a solitary guard post outside, alone with an infant and a toddler. The thought never occurred to her that her husband had played some pivotal role in the investigation of his former company. Nonetheless, she was concerned enough about the family’s safety to paste the information he’d given her on the inside of her closet door.
In the weeks after the search warrant, as the FDA’s investigators fanned out, soliciting both those who might help them and those who might implicate themselves, employees began choosing sides. Some remained loyal and hired company-paid lawyers. Ranbaxy promoted, and even relocated to India, several senior executives—including Abha Pant—thereby moving them out of easy reach of the FDA and American prosecutors. Others broke off contact with the company and cooperated with investigators. Dr. Raj Kumar received two messages at home from the company lawyer, Jay Deshmukh, urging him to call.
To Deshmukh, Kumar was a bomb that could detonate at any moment. He’d left on principle and had never agreed to remain silent. He might still have the devastating SAR that the company had worked so hard to destroy. The company’s top leadership had been shown the document, and it implicated them directly.
Kumar was “basically in hiding,” Deshmukh recalled. “We were trying to get him out of hiding. If he had good facts, we wanted to know. If he had bad facts, I wanted to know.” He added, “They were mostly bad facts.”
Kumar, who had returned to London, didn’t call Deshmukh back. He hired his own lawyer. Deshmukh, increasingly desperate to keep Kumar under wraps, called Kumar’s lawyer to offer legal assistance. He also left a chilling message: “Make sure that Raj is careful in what he tells the FDA, because he also has exposure in this case.”
Kumar read it as a clear threat.
On the morning of March 16, about one month after the search at Ranbaxy’s New Jersey headquarters, Dinesh Thakur arrived at the FDA’s Office of Criminal Investigations and was led to a conference room, where numerous investigators and prosecutors from the U.S. Attorney’s Office in the District of Maryland, whom he’d never met, were seated around the table. Robertson was there and explained that they now had enough evidence to proceed against the company.
One of the prosecutors told Thakur bluntly, “You need to get a lawyer.”
He was flabbergasted. “Why? I told you everything I know. You’re a lawyer. Isn’t it your job to protect people like me?”
“No, no, no . . . ,” the prosecutor began.
“You are telling me you verified all my allegations? I have barely worked for two years. How am I going to be able to afford a lawyer?” Thakur shot back.
“That’s not my problem,” said the prosecutor. “Now this is a formal investigation. None of the government attorneys can actually represent you.”
Robertson, noting Thakur’s distress, asked if he needed to use a restroom—which gave her the opportunity to speak with him privately in the hall. Robertson gave him contact information for an organization called the Taxpayers Against Fraud Education Fund (TAFEF), an organization that helped potential whistleblowers, and urged him to contact the group. They could help him find an attorney, she explained.
Thakur felt at his lowest ebb on the drive back to his temporary apartment in Belle Mead, New Jersey. He was seven thousand miles from his children, living on cereal and salad in a cheerless rental, while barely staying afloat financially. Now he had to find an attorney to protect him from the process he himself had set in motion. All evening he thought about the piece of paper Robertson had given him. He felt that calling the number would lead him even further away from the life he knew and expected. Yet he was already in a place he couldn’t recognize and getting in deeper by the day.
Thakur went to sleep thinking about the phone number Robertson gave him, and it was his first thought when he woke. That morning he called and left a message. By the afternoon, he had received a call back from TAFEF, which supplied him with a lawyer’s name and phone number.
At age thirty-seven, Andrew Beato was finding his way at the prominent firm of Stein, Mitchell, Muse & Cipollone LLP in Washington, D.C. The young lawyer had thinning brown hair, wore steel-rimmed glasses, and spoke in hushed tones so low that visitors had to lean forward to hear him. He typically wore a neutral expression, which did little to mask his air of intensity. When he smiled, which was infrequent, slight dimples emerged. He had been representing whistleblowers for about five years and was told by TAFEF to expect a call from a potential client.
His firm had a history of representing whistleblowers. In 2002, it had represented Cynthia Cooper, the internal auditor at WorldCom who’d uncovered an almost $4 billion accounting fraud. One of the firm’s founding partners, Jacob Stein, had represented Monica Lewinsky during the Clinton impeachment hearings. But Beato was still proving himself, and his judgments were subject to review.
It was late in the day on a Friday, and Beato was packing up to leave the office, running late (as usual) to meet his wife, who had also worked as an attorney and was now a stay-at-home mom. He had just gotten his coat on and was almost out the door when the phone rang. He was certain it was his wife, calling to ask where he was. The voicemail picked up. Instead, he heard the soft polite voice of a man with an Indian accent and a formal manner: the whistleblower.
Beato called him back and explained that he was just running out and asked for a “very short” overview. Thakur did not know where to begin, so he just started talking. As Beato listened, trying to hold on to the fragmentary pieces, he became certain that the man was crazy.
Thakur’s story sounded so implausible as to be impossible. The top executives at India’s biggest pharmaceutical company had committed intentional global fraud. The company’s drugs were being taken by U.S. consumers. And to hear the man tell it, the scope was not just limited to one manufacturing plant, or one drug. It was numerous plants and dozens of drugs being distributed around the world. The scope of the fraud the man was alleging made him sound deranged. He must not know much about how businesses operated, or even about how to make a drug, Beato figured. Fraud was typically limited and select—a rogue employee, a single incident, or a poorly managed plant. How could everything at a company be fraudulent?
It made no sense that hundreds of employees were allegedly participating in this fraud, as though it were just business as usual. That couldn’t happen. If it had, how could it have gone undetected for so long? As Thakur talked and talked, Beato grew more concerned about being late for his wife and increasingly dubious about the whistleblower.
“I have to go now,” Beato told him. He did not want to be unkind. “Why don’t you send me an email instead, with details about what happened?”
Less than twenty-four hours later, after exchanging about half a dozen emails with Dinesh Thakur, Beato had reversed his earlier view. Though he was far from clear on what had happened at Ranbaxy, he was beginning to think that some version of Thakur’s insane story just might be true.
In many ways, Beato was the perfect lawyer to make sense of the Ranbaxy case. Health care had long been his family’s business, and illness its fate. Beato had grown up in St. Louis, Missouri, the youngest of seven children. His mother died of breast cancer when he was two. His father, a dedicated internist, was the rare physician who would make house calls late into the night. Unflaggingly committed to his patients’ welfare, he was a poor businessman and refused to limit time with his patients in an era of managed care.
As some of his siblings entered health care, Beato turned to the law; he had arrived at Stein Mitchell right out of law school. At first, he represented companies in their dealings with the Federal Trade Commission. But the work left him cold. He didn’t want to get up every morning figuring out a way to get a company off the hook. How could he help people, not just corporations, from inside a corporate law firm, where he had to remain to pay off student loans? While Beato was still struggling to answer this question, his father died from a rare brain tumor. Though his father left the family with no savings, he had “wealth of character,” Beato recalled. Hundreds of his grateful patients turned out for the wake, proof that his father had lived a meaningful life dedicated to helping others.
Beato’s desire to do the same led him to a fledgling area of the law: representing whistleblowers. The practice dated back to the Civil War and fell under a part of the federal False Claims Act known as qui tam, an abbreviated Latin version of the phrase translated as “he who brings this action for the king as well as for himself.” It allowed whistleblowers to sue those defrauding the government and collect a portion of any recovered funds. The law had initially been intended to stop profiteers from selling defective supplies to the Union army. In the 1940s, after an amendment to the False Claims Act reduced the amount that a whistleblower could recoup, the law fell into disuse. In 1987, however, after reporting of widespread fraud by defense contractors (like the infamous $640 toilet seat sold to the Pentagon), the law was again amended to increase a whistleblower’s reward, creating a new incentive to report fraud, and for lawyers to take such cases.
Though Beato lost his first whistleblowing case, which involved a cardiologist doing unnecessary procedures, he saw the righting of wrongs against the people and their government as an essentially moral pursuit.
Weeks after their first conversation, Thakur sat across from Beato and several of his colleagues, including a senior partner, at the law firm’s conference table. Though smartly dressed and articulate, Thakur seemed exhausted and anxious, with dark circles beneath his eyes and sagging shoulders. Painstakingly, in a quiet voice, he began to describe the complex web of deceit that Ranbaxy had engaged in and his role in penetrating it.
Barely ten minutes into the meeting, Thakur broke down and began to sob. “What did I do?” he asked repeatedly. “What did I do? I just wanted to do the right thing.” He’d stupidly put his family in jeopardy, and now there was no going back. The FDA had started issuing subpoenas to Ranbaxy officials, and Thakur was fearful about how the company would respond. These problems were sorted out in India very differently, he explained. In considering the physical risks to Thakur and his family, the lawyers realized that they were dealing with something they had never confronted in the United States.
Thakur’s case was also inordinately complex. The lawyers had to consider the scope of the fraud. Was it even a false claims case? What violations had Ranbaxy committed, and had those materially altered the drugs? How could they prove that? And how could they best protect the man sobbing in their conference room? The case also posed a major financial risk for the firm: they could incur huge expenses, lose, and wind up with nothing. But after meeting with Thakur over the course of two days, the lawyers were almost certain, despite the daunting complications, that the firm would represent him. “This was a public health issue,” Beato recalled. “You were not going to find anyone at this firm backing down.”
In a quiet moment, Thakur asked Beato, “How do I pay you and what do I pay you? Obviously, you are not doing this for free.”
Beato’s answer came as a revelation. Thakur would pay them nothing. Instead, the firm would roll the dice on representing Thakur for free and work to help build the government’s case against Ranbaxy, with Thakur’s evidence as its primary guide. The firm would then file its findings in a confidential lawsuit against the company, which would remain under seal. While the government investigated, Thakur’s identity would remain secret. If there was a settlement, Thakur could net up to a third of the government’s recovery and Beato’s firm would get a portion of that. Under the arrangement, Thakur would become a legally protected whistleblower. Until that moment, he had not even known such a protection existed.