Shah, Agarwal and Purdy are charged with multiple counts of fraud and could face up to 30 years in prison.
Assistant U.S. Attorney Matt Madden attempted to persuade jurors not to buy the defendants’ primary argument: that the government’s key witness, Ashik Desai, was responsible for a fraud scheme that led to overbilling pharmaceutical companies, such as AbbVie, by $45 million over two years. The overbilling led to inflated financials used by investors and bankers that provided more than $900 million in loans and venture capital to the company.
Desai, who also was a top executive at the company, pleaded guilty to one count of fraud and agreed to testify in exchange for prosecutors’ recommendation that he be sentenced to no more than 10 years.
He oversaw a small team of analysts who were responsible for providing lists of doctors’ offices to customers, as well as data about the performance of that advertising, which was used to bill them.
Shah’s lead attorney, John Hueston, said Desai and his team worked alone on “fraud island,” carrying out the fraud, which Hueston said Desai hid from his bosses.
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Madden called it fiction: “You learned about a place called ‘fraud island,’ supposedly inhabited by a 20-year-old mastermind, and these three execs were babes in the woods, betrayed and tricked by Ashik Desai for years.
“It’s nuts that this 20-year-old walked into the company and made all this stuff up,” he said. “It’s laughable for them to suggest Ashik outsmarted them. They all went to Northwestern. It’s obvious how smart they were and how much they knew about the business. . . .The defense attorneys spent 20 hours telling you that their clients were totally clueless about the business they ran.”
Desai was at the center of the case, spending 2 1/2 weeks on the stand, half of it being cross-examined by the three defense teams.
Like most witnesses who cut plea deals, Desai’s involvement in the alleged crime presented credibility challenges. Desai admitted lying to customers and his bosses, and lying about colleagues when questions arose that he was falsifying information.
Desai also has admitted that he alone decided to falsify third-party reports about the increases in prescriptions that resulted from advertising. He admitted that he never told his bosses that he was falsifying the return-on-investment reports.
A major question in the case is whether jurors will distinguish between Desai’s admitted fraud of falsifying those ROI reports and what prosecutors say is the core fraud of overbilling customers for the amount of advertising they received.
No jurors were excused for illness or other reasons during the trial. Judge Thomas Durkin opted for seven alternates, or more than twice the usual number, in anticipation of losing jurors during such a lengthy trial.
This story first appeared in Crain's Chicago Business.