Investigating a Contemptible Fraud


I've seen all kinds of fraud. Some are mind-numbing. Others are intriguing or preposterous. But only a few are truly contemptible. The cover story in this month's Fraud Magazine tells of a fraud that endangered the lives of the poorest of the poor while generating millions for the fraudsters.

On May 13, 2013, Ranbaxy USA Inc., a subsidiary of Ranbaxy Laboratories Limited, pleaded guilty to seven federal criminal counts of selling adulterated drugs with intent to defraud, failing to report that its drugs didn't meet specifications and making intentionally false statements to the government. Ranbaxy, in the largest drug safety settlement to date with a generic drug manufacturer, agreed to pay $500 million in fines, forfeitures and penalties.

Dinesh Thakur, a former research executive with Ranbaxy, blew the whistle on the company after his boss found that it had provided false data to the World Health Organization. Thakur, then a new employee, investigated and discovered a company culture that not only tolerated fraud but also apparently celebrated and encouraged it among its employees. His boss reported Thakur's results to the board, and he then later resigned in protest. Thakur also resigned after Ranbaxy falsely accused him of breaking company rules.

Thakur eventually took his discoveries to the U.S. Food and Drug Administration and endured almost nine years of aiding governmental investigative agencies before Ranbaxy finally pleaded guilty.

"It certainly was cathartic to stand in the Federal Court in the District of Maryland in May of last year to hear the company plead guilty to seven counts of felony," Thakur says in the cover interview article. "I felt the weight of this case removed from my shoulders. It was a victory not just for me and my legal team, but the hundreds of millions of patients worldwide who were subjected to adulterated medicines by this company in the most unethical manner. More importantly, this case sent a strong message to manufacturers of medicines that you cannot hide from the long arm of the law just because you are a foreign entity."

For "Choosing Truth Over Self," the ACFE honored Thakur with its Sentinel Award at the recent 25th Annual ACFE Global Fraud Conference.

I know that we'll see many more contemptible frauds. But thanks to Thakur, and the diligent investigators who investigated Ranbaxy's systemic crimes, we'll see a bit less fraud that ravages the defenseless.