A former Mylan information technology executive pleaded guilty in federal court to insider trading and preparing false tax returns.
The Department of Justice announced Friday that Dayakar Mallu, 51, of Orlando, Fla., faces more than 25 years in prison for charges of conspiracy to commit securities fraud and aiding in the preparation of a false tax return.
Mylan is based in Cecil Township.
The case was initially filed under seal at the beginning of August in U.S. District Court for the Western District of Pennsylvania
According to court records, Mallu, who at the time was living in McDonald, became Mylan’s vice president of global operations information technology in 2014.
Mallu conspired with Mylan’s Chief Information Officer (CIO), who is listed in court records as an unnamed co-conspirator.
The CIO would tip off Mallu about Mylan’s impending public announcements concerning drug approvals by the FDA, according to court records. Mallu would then trade stocks based on the information.
According to court records, Mallu’s insider trader scheme netted him a profit of more than $4.2 million.
Mallu shared his profits with the CIO through direct and indirect payments. Court records state that payments were often made in foreign currency, and that they “used trusted intermediaries to exchange the cash in a foreign country, and used untraceable methods of communication to conceal the illegal nature of, and profits from, their conspiracy.”
Mylan became Viatris in 2020 after merging with a division of Pfizer.
According to court records, Mallu was also the owner of Opel LLC, a computer programming company based in Farmington Hills, Mich. Though another person was listed as the owner, the government said Mallu controlled the company’s operations.
When filing Opel’s 2015 tax return, Mallu reported that the company had paid $1.3 million to the contractor. The “contractor,” however, was a fake company and the money was instead transferred to personal account belonging to Mallu, according to court records.
According to the DOJ, Mallu faces a maximum of 25 years in prison for the insider trading, and three years for tax fraud. He is scheduled to be sentenced on Jan. 24.