Four Indicted In Pharmaceutical Kickback Scheme


CLEVELAND - Two doctors from Northeast Ohio and two drug company salesmen were indicted in federal court for their roles in a kickback conspiracy in which the doctors allegedly received money and other things of value in exchange for writing prescriptions of Nuedexta for patients that did not have the condition.

Named in the 83-count indictment are: Deepak Raheja, 63, of Hudson; Gregory Hayslette, 43, of Aurora; Frank Mazzucco, 41, of Dublin, and Bhupinder Sawhny, 70, of Gates Mills. All four are charged with conspiracy to solicit, receive, offer and pay health care kickbacks.

According to the indictment:

Raheja is a medical doctor who specialized in psychiatry and neurology whose primary practice location was 2307 West 14th Street in Cleveland. Sawhny is a medical doctor who specialized in neurosurgery whose primary practice location was 6731 Ridge Road in Parma.

Hayslette worked as a pharmaceutical sales representative for Avanir Pharmaceuticals, Inc. from June 2015 through September 2016. He was responsible for marketing Nuedexta, and his territory included Northern Ohio. Mazzucco was the regional business manager and supervised Hayslette.

Avanir manufactured Nuedexta, a drug approved by the FDA solely to treat pseudobulbar affect (PBA). PBA is a condition characterized by involuntary, sudden and frequent episodes of uncontrollable laughing and crying, according to the indictment.

Avanir promoted Nuedexta through a speaker’s bureau, in which Avanir representatives engaged doctors to speak about and promote Nuedexta to other medical professionals. Typical speaking engagements involved dinner at a high-end restaurant in which the doctor made a presentation with a slide deck provided by Avanir. A company sales representative was responsible for inviting attendees and attending the presentation.

Raheja joined Avanir’s speaker’s bureau in February 2011. He gave approximately 211 speaking presentations at various restaurants and doctor’s offices between October 2011 and April 2016. Raheja received approximately $1,500 for each of these purported presentations.

Raheja received approximately $331,550 from Avanir between October 2011 and April 2016. During this time, Raheja wrote approximately 10,088 Nuedexta prescriptions – the highest in the country, according to the indictment.

As part of the conspiracy, Hayslette and Mazzucco incentivized physicians to write Nuedexta prescriptions and thereby increase compensation to themselves. This included:

Hayslette and Mazzucco arranged speaker’s bureau programs, many with little to no educational value, for Raheja, Sawhny and other medical professionals relating to Nuedexta.

Hayslette and Mazzucco facilitated the payment of honoraria and other expenses to Raheja.

Hayslette facilitated the submission of false and fictitious sign-in sheets from speaking engagements to justify the event and maximize payments and other benefits to Raheja and Sawhny.

Hayslette facilitated the promotion of non-FDA-approved uses and dosages of Nuedexta through the speaker’s bureau program and the distribution of literature to physicians.

Hayslette offered free firearms training, office equipment and other things of value to Sawhny. 

Hayslette provided coffee, breakfast, lunch and other food and beverage to Raheja, Sawhny and their office staff, usually with little to no substantive discussion about Nuedexta.

Hayslette accessed protected patient health information without authorization, and facilitated the submission of false diagnoses of PBA on prior authorizations to Medicaid Managed Care Organizations.

It was further part of the conspiracy that Raheja and Sawhny took steps in return for things of value, such as:

Raheja and Sawhny wrote more Nuedexta prescriptions and caused the submission of billings to Medicare and Medicaid for Nuedexta prescriptions for patients that did not have PBA.

Raheja and Sawhny also submitted and caused the submission of materially false and fictitious prior authorizations to Medicaid MCOs that reflected diagnoses of PBA for patients that did not actually have PBA.

Raheja falsely diagnosed patients with PBA, and recorded and caused the recording of false symptoms in patient records to support a diagnosis of PBA. 

Sawhny also allegedly permitted unauthorized access to protected patient health information. 

“We all trust our doctors to make decisions based on what is best for the patient, not based on which sales representative is paying them money on the side and springing for steak dinners,” U.S. Attorney Justin Herdman said. “Doctors and the pharmaceutical sales reps who don’t follow the rules will be held accountable for their actions.”

“These doctors will now answer to a court of law for financially benefitting from lucrative speaking engagements and writing questionable prescriptions for one medication,” FBI Special Agent in Charge Eric B. Smith said. “The FBI will continue collaborative efforts to root out healthcare fraud and hold those responsible accountable for their fraudulent, unethical behavior."

“Kickbacks are to ethics like a magnet to a compass — you lose your direction,” Ohio Attorney General Dave Yost said. “Imagine trusting your doctor to do what’s right for your health, and finding out he’s instead doing what’s right for his wallet. This is much more than a financial crime.”

If anyone believes they may have been a victim in this case, they are encouraged to call the FBI at 216-622-6963.

If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.

The FBI, Health and Human Services – Office of Inspector General and the Ohio Attorney General’s Medicaid Fraud Control Unit investigated this case. Assistant U.S. Attorneys Michael L. Collyer and Megan R. Miller are prosecuting the case.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

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