A former information technology (IT) executive at Mylan today pleaded guilty to conspiracy to commit securities fraud and aiding in the preparation of a false tax return.
Dayakar Mallu, who at the time of the fraud served as VP of global operations information technology at Mylan, admitted to the charges in court in the Western District of Pennsylvania, according to a U.S. Dept. of Justice news release.
Between 2017 and 2019, Mallu conspired with others to trade the securities of Mylan — the maker of the EpiPen — ahead of corporate announcements concerning drug approvals, financial earnings and a merger. Mallu placed trades in the company’s securities and shared trading profits with his co-conspiratory through cash transactions in India, with the trading resulting in more than $8 million in unrealized profits and losses avoided.
According to the DOJ release, Mallu ultimately realized net profits and losses avoided totaling more than $4.2 million as a result of his insider trading.
Mallu additionally admitted to sending false information to his tax preparer relating to Opel Systems, a company he owned and controlled. According to court documents, Mallu falsely told the preparer that Opel had paid $1.3 million to a contractor when he had actually caused the company to transfer those funds to his personal securities brokerage account, resulting in the preparation of a false 2015 corporate return for Opel.
A federal district court judge will determine any sentence for Mallu, who is scheduled to be sentenced on Jan. 24, 2022. He faces a maximum penalty of 25 years in prison for the conspiracy offense and three years in prison for the tax offense.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division; Assistant Director in Charge Steven M. D’Antuono of the FBI Washington Field Office (FBI-WFO); and Acting Special Agent in Charge Brian Thomas of the IRS-Criminal Investigation (IRS-CI) Detroit Field Office made the announcement.
The FBI-WFO and IRS-CI are investigating the case.
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