SEPTEMBER 2009
Silver Spring, Maryland
Based on the numbers alone, the Ranbaxy case held the promise of being a blockbuster.
Federal agents had emerged from their search warrant at Ranbaxy’s headquarters with over 30 million pages of documents. Three top executives—Malvinder Singh, Brian Tempest, and Abha Pant—sat squarely in prosecutors’ crosshairs. “I’m inclined to say ‘felony or nothing’ when it comes to the individuals,” one of the case’s lead prosecutors, Assistant U.S. Attorney for the District of Maryland Stuart Berman, asserted to colleagues in a September 2009 email. He would have considered “misdemeanors to resolve borderline cases,” he noted. But there was nothing borderline about Ranbaxy.
By the spring of 2010, government prosecutors had thrown down a gauntlet. They floated a $3.2 billion settlement to Ranbaxy’s lawyers to resolve the company’s criminal and civil liability, which would make the judgment the largest against a pharmaceutical company in U.S. Justice Department history.
But over at the FDA, as Debbie Robertson worked alongside other investigators out of a war room stacked high with jackets, well into her fifth year of painstaking work on the case, her feelings of frustration and bitterness were growing by the day. She was not alone. For dozens of investigators, special agents, and attorneys, the seemingly slam-dunk case had turned into a morass and spread recriminations from the U.S. Attorney’s Office in Baltimore to the Justice Department’s Office of Consumer Litigation to the FDA’s Office of Criminal Investigations. Out of a sense of fatalism and superstition, some investigators wouldn’t even say the name of the company aloud. They referred to it as the “R Word.”
An alphabet soup of government agencies and divisions were involved in the case, including criminal prosecutors, two branches of the Justice Department’s civil division, inspectors general from several agencies, and Medicaid fraud control units. At the FDA alone, the agency’s Ranbaxy enforcement team now comprised at least thirty people from over a dozen different divisions with bewildering acronyms—ORA, OIP, OCC, CDER, OC, OCI.
Even at its best, this vast machinery could easily become dysfunctional. But the Ranbaxy case posed a unique difficulty: the defendant was headquartered on another continent. Basic investigative tasks—interviewing witnesses, obtaining documents—became major jurisdictional challenges. Could prosecutors get India to extradite anyone, for anything, let alone get an expedited visa for a witness they needed to interview?
A more human problem, however, lay at the center of the case’s difficulties: growing animosity and distrust between the FDA’s investigators, who had lived and breathed the investigational details, and the Justice Department’s prosecutors, who had been tapped to come on board. In theory, the two groups were on the same team. But somehow they’d become opponents as progress on the case slowed to a crawl. In the FDA’s war room, a picture of Malvinder Singh was taped to the wall, and someone had drawn in devil’s horns. Prosecutors objected when they saw it, and the picture was taken down.
It was a small moment of discord, but one that underscored the tensions that had led Robertson and her colleagues to doubt their very first investigative decision: to take their case to the Justice Department’s Maryland district.
The FDA had limited legal authority. For any formal investigation, it needed to partner with prosecutors. The FDA could have taken the case to any Justice Department district able to claim jurisdiction—in this case, New Jersey, where Ranbaxy had its headquarters; or New York, where prosecutors could almost always assert prerogative. But FDA criminal investigators had gone to the federal prosecutors in the agency’s backyard, only to discover how difficult it was to get the unbroken attention of a lawyer there. The prosecutors were split between administrative duties and other ongoing trials. They kept getting switched on and off the case, as the wrongdoing being uncovered at Ranbaxy seemed to grow in scope and complexity. Even drafting the affidavit for the search warrant took almost a year. Prosecutors kept returning it to FDA agents for revision, but offered little affirmative guidance.
Once the search warrant was approved, it yielded mountains of incriminating information. But Ranbaxy’s defense attorneys immediately claimed the material was covered by attorney-client privilege and managed to freeze review of it for almost eighteen months. Prosecutors did not assign a full-time attorney to review whether the documents were indeed privileged, and so they simply sat in government storage, untouched. “They took every batch record, they took files of emails, they took all the lab notebooks, they took everything . . . and then they had nobody to look through it,” said one FDA compliance officer. “They should have had a team of twenty people to go through it. It seemed all for naught.”
Robertson and her colleagues conjectured that, had the FDA gone to prosecutors in the Eastern District of New York, with their reputation for speed and aggression, the case would already have been over, with the company shut down and executives in jail. The disarray and lack of follow-through they experienced from the Maryland office led them to joke repeatedly, “If only we had a prosecutor . . .”
But more than anything, a single incident crystallized the distrust. After the search warrant, federal agents left an inventory of seized documents for company officials, as required. Robertson and her colleagues then created a far more sensitive document, which they called the “Princeton Headquarters” spreadsheet. It listed the most important evidence they’d seized, annotated crucial lines of inquiry, and contained potential leads. In late 2008, Ranbaxy’s lawyers asked prosecutors for a copy of this spreadsheet, a request that triggered a meeting between Robertson, her colleagues, and Justice Department lawyers, including the senior litigation counsel in the Office of Consumer Litigation, Linda Marks. They decided as a group that the document was too sensitive to share.
But just a few months later, on February 9, 2009, Marks emailed Robertson asking for the spreadsheet, with the intention to turn it over to defense lawyers. Robertson responded, reminding Marks of the group’s decision not to turn over the spreadsheet. Marks replied, “Is there still an original copy of the Princeton inventory without highlights or flags?” She added, “I would never disclose to defense anything that indicated what items we’re interested in, but a detailed inventory list, albeit agent work product, is routinely provided to defense counsel.” Her email triggered a meeting the next day, in which the group again agreed not to share the document.
Two months later, in April, Robertson got a horrible jolt when a Ranbaxy lawyer emailed her, asking for help finding a document listed in the “Princeton seizure log.” Robertson was stunned and wrote back several hours later, “I am a little puzzled. Can you tell me what document you are referring to as the Princeton seizure log and where you got it from?” The lawyer responded that the spreadsheet had come from Justice Department lawyer Linda Marks, in late February. With no consultation or warning, Marks had violated their agreement and turned over the annotated spreadsheet, their Rosetta Stone, a map of their thinking about the case, to defense lawyers, a claim that a Justice Department official would later deny.
In cold fury, Robertson followed up with Marks, writing, “Despite our agreement, you took affirmative steps to obtain [the document] and send it to defense counsel.” The document, she wrote, gave the defense “a roadmap” of the prosecution’s strategy and could even “help them to identify our cooperating witness.” She noted, “Actions such as this further diminish the already strained relationship between agents and attorneys, as we find it hard to trust a prosecutor that appears to be less than forthcoming.”
Weeks later, Marks pulled Robertson aside and said, “We need to talk.”
“Fine,” Robertson responded. “But my supervisor isn’t here, and I am not talking to you without a witness.”
Ranbaxy’s lawyers had first asked the government for a global resolution to the case in January 2010. This meant one settlement to resolve every criminal, civil, and regulatory claim that the government had against Ranbaxy. Though a daunting task, it was a simpler and far less costly one than going to trial.
By March, the FDA’s associate chief counsel for enforcement, Steven Tave, began to hammer out a possible resolution: a company guilty plea to multiple counts of conspiracy and making false statements; a criminal fine based on sales figures for all of Ranbaxy’s U.S. drugs from all its plants; a civil settlement related to the company’s false claims; and a consent decree that would require the company to transform its operations before drugs made at its major plants would be allowed into the United States. No foreign company had ever committed to such a decree.
But with a goal of midsummer to wrap up the case, deliberations between the FDA’s team and prosecutors bogged down over the size, structure, and even the theory of the penalty. Should it be based on all U.S. sales? If so, gross or net? Should it cover all the company’s drugs, or specific ones on specific dates?
As the two groups deliberated, the theory of the case became murkier and the size of the potential settlement began to drop. “Guess we are going with some sort of net sales figures?” Robertson wrote to her colleague Steve Tave in August 2010.
Tave wrote back, “That would require [the U.S. Attorney’s Office] to make a decision about something instead of using their canned response that they’re still waiting for something from FDA. (Oh, am I sounding a little bitter?)”
As the two sides bickered, and Ranbaxy’s lawyers pleaded for a resolution, President Barack Obama signed the Affordable Care Act (ACA) into law that March. It made generic drugs essential to the 20 million Americans who would now have their access to pharmaceutical treatment covered under the law. While the ACA did not enter the tortured deliberations by name, it underscored the importance of fixing the generic drug supply.
As the months stretched on without resolution, prosecutors and the FDA’s team traded thinly veiled barbs over who was to blame for the delay. “My management is again asking when this case is going to be resolved—and if we are going to charge any individuals,” Assistant U.S. Attorney Berman wrote to Robertson and Tave in July.
Irked, Tave wrote back to Robertson, “I want to ask them about the Consent Decree, which I sent more than a week ago . . . (but FDA is the one holding things up, of course).”
By September 2010, Robertson learned that prosecutors had not even pulled Ranbaxy’s sales data, on which a settlement would be based. “Looks to me like DOJ is admitting they have not done anything to bring this case to settlement,” Robertson wrote to her supervisor. “What have they been doing for 10 months?”
Finally, as 2010 drew to a close, Tave tried to break through the logjam. In a lengthy email to prosecutors, he exhorted: “This is a strong case. This is an important case. A lot of people have spent a lot of time building this case into what it is now.” He detailed why negotiations for a settlement should start at $1.6 billion and not go lower than $817 million. Reflecting the tortured process, he wrote, “At the risk of sounding like a broken record, if anyone believes that the evidence compels a different result, would you please explain what that result is, how you got there, and explain the evidence supporting that view?” He added, “We have a defendant that has been pleading with us for more than a year to come to the table to resolve this case. . . . There is absolutely no reason why we shouldn’t be able to do so.”
And yet, they couldn’t. By March 2011, one of the prosecutors was ready to capitulate and not impose criminal penalties for one of the main manufacturing plants. Robertson sent an exasperated note to her supervisor: “It just keeps getting uglier as we do not have a criminal prosecutor that will get involved.”
By August 2011, Ranbaxy’s lawyers had whittled down their counteroffer to $260 million. Plans to prosecute individuals—which at one point had included an idea to immunize Pant to testify against Singh—had fallen by the wayside. As Malvinder Singh would remind a journalist years later, “I was never questioned or contacted by investigators.” Nor was Abha Pant.
Robertson thought frequently about retiring and longed to quit the case. But one thought kept her going: she felt an obligation to Thakur. “This man came forward and pretty much risked his life,” she reflected. The least she could do was help bring the company to justice, even if the effort was putting her own sanity on the line.
In the years since 2005, when Dinesh Thakur had first reported his concerns to the FDA, he built a business called Sciformix that employed medical professionals from India, the Philippines, and elsewhere to help drug companies deal with patient complaints and other regulatory issues. The company had even become profitable. But he spent much of his time at the Stein Mitchell offices in Washington, D.C., helping two dozen lawyers and support staff in Andrew Beato’s firm sift through roughly four hundred boxes of documents to help build the government’s case.
The twin obligations of Sciformix and the Ranbaxy case kept Thakur working almost eighteen hours a day. He traveled back and forth between India and the United States. Even during his return trips to India, he spent more time in Mumbai on business than he did at home in New Delhi. Though he remained impeccably dressed, with razor-sharp pleats in his khakis and neatly ironed collared shirts, the circles under his eyes grew darker and more pronounced. His temper got shorter. Even when he was with his family, who had remained in India, he seemed to disappear into his laptop and his own doubts about whether it had been smart to bring the fraud at Ranbaxy to the attention of the U.S. government.
Arguably, he was working hard to secure his family’s future and Sonal had chosen to remain in India. But day to day she felt isolated with two young children. He was more familiar to them as a face on a computer screen than as a present father and husband. When he was home, he would spend long hours in his basement office, reading all the materials his lawyer sent to him. “Mentally, he was never there,” said Sonal, “no matter how much he tried.”
Beato had wanted Thakur to tell his wife as little as possible about the government’s investigation into Ranbaxy and his role in it. The case and his lawsuit that had started it were both confidential, the related court records under seal, and Beato was worried about the safety of Thakur’s family. He was also concerned about Sonal’s discretion and how she would react. The resulting silence had strained Thakur and Sonal’s relationship to the breaking point.
In February 2009, Thakur returned to India, in time to celebrate Mohavi’s third birthday. On that visit, he took Sonal to lunch at a popular Chinese restaurant in Gurgaon, in the Royal Bank of Scotland office building. As their waiter brought the soup course in the crowded restaurant, Thakur said softly, “I need to share something with you.” He had decided to defy his own attorney for the sake of his marriage. Gingerly, he began to explain everything: what had actually happened at Ranbaxy; what he had done about it; how he now had a lawyer and was suing the company on behalf of the U.S. government; how his identity would remain secret.
Sonal stopped eating, and her soup grew cold. She was stunned—and frightened. Not only was her husband caught up in the dangerous machinery of an investigation. He had jump-started it. He was a key witness, whose identity could be disclosed at any minute. The family could be in danger. Thakur explained, “Look, they are playing with the lives of people here. I couldn’t sit back and not do anything about it.”
“Why didn’t you tell me about this before?” she asked.
“I wasn’t sure if you were going to support me. I thought you might have gotten scared, and then I might not have done it.” If he’d consulted her, he said, “that would have made me weaker.” On some level, she felt he was right. Had he consulted her, she would have given him ten good reasons not to report the fraud.
“Who’s paying for it?” she asked of the lawsuit.
He explained that his lawyer would not charge them, but would be paid out of the government’s settlement. That her husband had a lawyer, let alone a free one, was a bewildering concept. Thakur did not mention a possible financial reward for them. The chances of that happening seemed very unlikely and had not motivated him in the first place.
“Are we safe?” she asked. She knew what happened to whistleblowers in India.
“Nobody knows about it.” He explained that the case was filed under seal, another concept that seemed impossible to grasp, given how flimsy and political a tool the law was in India.
“Did you think about all of this before you filed the case?”
“I actually thought that once I reported it,” he said, “I was done with my job.” Long ago, he had imagined that a single tip to the FDA would be enough to stop Ranbaxy’s fraud.
For the first time, it all made sense to Sonal: the parade of bosses, her husband’s sudden resignation, the long hours he had spent in his basement office. He was utterly logical and not prone to making rash decisions. For him to leave a job without having another one had made no sense—until now. Though Sonal had a clear explanation for her husband’s actual and mental absence, this knowledge did little to salve the family’s wounds.
After their discussion in the restaurant, Thakur rarely spoke again about his interactions with the FDA, and Sonal didn’t ask. “You are doing whatever you need to do,” she would say in frustration, not understanding or feeling like a part of his decision-making. Whenever she did weigh in, her question was: “When is the case going to end?” It was a question he’d asked himself many times and could not answer.
With Thakur’s return to the United States, their marriage grew even more strained. Sonal tried to rationalize that he was absent because he was doing something positive to help others. Yet when she felt lonely and overwhelmed with the children, the thought gave her little solace. Sonal toyed with the idea of leaving him, a foreign concept born of desperation.
Couples counseling is not a regular part of Indian culture. So Sonal sought help from an older neighbor to whom she’d become close. Sonal and Thakur met with her as a couple. The neighbor’s advice was standard issue: try to make it work; make more of an effort to understand each other’s positions. But they remained apart and unhappy, and fought when they were together. “We couldn’t find that peaceful ground,” said Sonal. Thakur tried to bury himself in work. Sonal told him, “You’re just getting crazier and crazier.”
In India, “you don’t just move out of a marriage,” said Sonal. It becomes a family affair. And so their parents began to weigh in. Her mother spoke to his father about Thakur’s long absences and the pressure on the family. Thakur’s father then spoke to Sonal. The older man, who knew nothing of his son’s lonely quest, tried to impart some wisdom: “I know what you’re doing is not easy,” he advised, “but at the end of it, you have to make it work. The woman of the family can hold everything together or let everything go.”
Though hardly an enlightened viewpoint, in this instance it happened to be true. Thakur had chosen his path, and it was up to Sonal to keep the family on it. Her cultural training acted as a counterweight to her feelings of resentment. “In India, we are sort of taught to compromise on things,” as she put it. “You don’t start looking for options.” But with her loneliness intensifying, it was hard not to think about what those options might be.
As the government’s case dragged on and the tension between the couple grew, Thakur turned to his lawyer, Andrew Beato, to help keep the peace. Beato spoke to Sonal. He tried to reassure her that her husband’s identity would remain secret and that the case would end at some point. But he had a somewhat different message to impart, one that Thakur would never think of sharing. “What your husband is doing is unparalleled,” Beato told Sonal. There had never been a case of a whistleblower from India, fighting a battle of this magnitude in the United States, he explained. Beato wanted to let her know that, though anxiety about her family’s safety was “valid and paramount,” as he put it, there were “larger issues about stopping a company that was doing something very bad.” Her husband was “a hero,” Beato explained.
Thakur didn’t feel heroic. Mostly, he felt distraught. As the months—and years—slid by, he felt suspended in a terrible twilight: unable to move forward and caught in the past. Each time a deadline approached and it appeared the government would finally bring charges against the company, a government lawyer instead called Beato to request an extension. Thakur, on whose knowledge the government had built its case, had no choice but to acquiesce if he wanted the case to succeed. “I am someone who plans everything,” said Thakur. “I am a very outcome-driven person.” But he never planned to have the case hanging over his head for years, with no way to influence the outcome.
In the summer of 2009, Sonal moved the family from their freestanding home on a quiet side street to a gated community behind a guard post off a major Gurgaon thoroughfare. For the ever-social Sonal, the move eased some of her loneliness. Suddenly, she had neighbors with young families and a social life independent of her husband. The complex, named Unitech World Spa, had a gym, a clubhouse, parties, and even a singing group, which she joined. She drafted Thakur to be a part of it, though he was a reluctant and infrequent participant. The perpetually absent Thakur was a mystery to her new friends: “People used to question me, why does he spend so much time in the U.S.? Why is he there all the time?” She didn’t tell them. But the move shifted things ever so slightly between them. She became less reliant on him, and he noticed that his wife’s new life didn’t necessarily include him.
In October 2010, Thakur took his daughter to a Halloween party at the complex’s clubhouse, only to come face-to-face with one of his new neighbors, Abha Pant. She was still Ranbaxy’s vice president of regulatory affairs. Because of Thakur’s disclosures, the FDA’s associate chief counsel would soon send prosecutors a lengthy memo recommending that she be criminally prosecuted for her role in Ranbaxy’s fraud. Her name, as well as Malvinder Singh’s, topped every Justice Department list of “suspect persons” at Ranbaxy. Thakur’s name, too, was on a list, one that Pant may have known about: of possible whistleblowers cooperating with the government compiled by company executives.
The two spoke briefly. She mentioned that Ranbaxy’s new CEO had moved into the apartment complex as well, which was not what Thakur wanted to hear.
“I recently ran into Rashmi,” she added, referencing Thakur’s old boss Barbhaiya, who had recruited him to Ranbaxy. “He hasn’t changed much.”
“What do you mean by that?” Thakur asked, his discomfort growing.
“He still has a pretty big ego.” As Pant tried to make conversation, it seemed to Thakur that she was probing for information. She brought up his other previous boss, Kumar. “He seemed like a fish out of water at Ranbaxy,” she said.
“He was a pleasure to work with,” Thakur said stiffly, ending the conversation.
As much as he tried to disappear, he felt surrounded by the company and the consequences of his time there. He relayed the encounter to his lawyer, Beato, typing notes as they spoke in his ongoing effort to document the case. In a single sentence, he wrote to himself: “When the news becomes public, leave here.”