Fed­eral judge dis­misses fraud case

He as­sails pros­e­cu­tors’ ac­tions in trial of area phar­macy chain owner

Baltimore Sun - - NEWS - By Jes­sica An­der­son Bal­ti­more Sun writ­ers Justin Fen­ton and Al­lan Vought con­trib­uted to this ar­ti­cle. jkan­der­son@balt­sun.com

A fed­eral judge has dis­missed fraud charges against the owner of a lo­cal phar­macy chain, ac­cus­ing pros­e­cu­tors of fail­ing to dis­close ev­i­dence, pre­sent­ing “sig­nif­i­cant” false tes­ti­mony at trial and de­stroy­ing ev­i­dence.

U.S. Dis­trict Judge Ge­orge L. Russell III called the ac­tions of fed­eral pros­e­cu­tors im­proper and said they “shock the con­science of this court,” ac­cord­ing to tran­scripts of the hear­ing held last week, dur­ing which charges were dis­missed against Reddy An­nap­pareddy, the head of Phar­ma­care and Care­mer­ica, a chain of phar­ma­cies that op­er­ated in Mary­land, Penn­syl­va­nia and the Dis­trict of Columbia.

An­nap­pareddy, 48, was charged in July 2013 with health care fraud and ag­gra­vated iden­tity theft. Pros­e­cu­tors al­leged that he de­frauded Medi­care, Med­i­caid and pri­vate in­sur­ers by sub­mit­ting claims for pre­scrip­tion re­fills that were nei­ther re­quested by the cus­tomers nor re­ceived by them. The in­dict­ment also al­leged that the in­sur­ers were not paid back when the cus­tomers did not re­ceive the med­i­ca­tions.

An­nap­pareddy was con­victed by a fed­eral jury in De­cem­ber 2014. He then hired new lawyers, Mark Schamel and Joshua Green­berg of Wash­ing­ton, who successfully pressed for a new trial. He was sched­uled to be re­tried later this month.

His at­tor­neys ar­gued last week that the charges against their client should be dis­missed be­cause fed­eral pros­e­cu­tors mis­in­formed ju­rors, de­stroyed ev­i­dence and pre­sented false ev­i­dence at his trial, which they said showed a “pat­tern of out­ra­geous pros­e­cu­to­rial mis­con­duct,” ac­cord­ing to one mo­tions fil­ing.

In dis­miss­ing the charges, Russell said An­nap­pareddy’s “con­sti­tu­tional due process rights were vi­o­lated, and they were vi­o­lated by mis­takes the gov­ern­ment made,” ac­cord­ing to the tran­script.

An­nap­pareddy could not be reached for comment Tues­day. His at­tor­neys did not re­spond to a re­quest for comment Tues­day.

Marcia Mur­phy, a spokes­woman for the U.S. at­tor­ney’s of­fice in Mary­land, said in an email that “su­per­vi­sors are re­view­ing the judge’s rul­ing and will take ap­pro­pri­ate steps.”

An­nap­pareddy’s at­tor­neys ar­gued in court fil­ings that pros­e­cu­tors in­ten­tion­ally de­stroyed ex­cul­pa­tory ev­i­dence.

In re­sponse, pros­e­cu­tors ar­gued that An­nap­pareddy’s at­tor­neys had “nu­mer­ous oc­ca­sions” to re­view four boxes of files that were “among the hun­dreds” kept in a ware­house be­fore they were de­stroyed, and “had the op­por­tu­nity to copy on those same mul­ti­ple oc­ca­sions and did not as­sert a right to af­ter trial.”

“I did not do this in bad faith. I be­lieved in my heart that I had con­sent. And I knew that the de­fense had been through these doc­u­ments many, many times, as we did, and none of them were used,” said As­sis­tant U.S. At­tor­ney San­dra Wilkinson, who tried the case.

Russell ques­tioned why pros­e­cu­tors would not pre­serve ev­i­dence while a mo­tion for a new trial was pend­ing.

An­nap­pareddy’s at­tor­neys also said pros­e­cu­tors “pre­sented false ev­i­dence and ar­gu­ments to the jury” and the court about a lack of re­sponse by An­nap­pareddy to an email from a phar­macy tech­ni­cian, which was used as the “cen­ter­piece of the gov­ern­ment’s case at the first trial.”

His at­tor­neys said phone records showed An­nap­pareddy did re­spond with a phone call, in­stead of an email, but that in­for­ma­tion was not pre­sented at trial.

Wilkinson told the judge that her of­fice did not have the phone records at the time. “We never got them, be­cause we sub­poe­naed the wrong ser­vice provider,” she told the judge, ac­cord­ing to the tran­script.

The judge also found that pros­e­cu­tors failed to turn over in­for­ma­tion about dis­crep­an­cies in the amount of loss suf­fered by the gov­ern­ment pro­grams cal­cu­lated by ex­pert wit­nesses. The judge found that the wit­ness’ opin­ions of the losses, which were less than those of the gov­ern­ment’s au­di­tor, should have been turned over to de­fense at­tor­neys.

Four of An­nap­pareddy’s co-de­fen­dants pre­vi­ously pleaded guilty in the case.

Vipinku­mar Pa­tel and Ji­gar Pa­tel pleaded guilty to mak­ing false state­ments re­lat­ing to health care mat­ters. Ji­gar was sen­tenced to 13 months and Vipinku­mar has yet to be sen­tenced.

Ram Gu­ru­vareddy pleaded guilty to ob­struc­tion of a health care fraud in­ves­ti­ga­tion and re­ceived five months of pro­ba­tion, ac­cord­ing to court records.

Venkata Srini­vas Man­nava pleaded guilty to con­spir­acy to com­mit health care fraud and un­law­ful acts with a con­trolled sub­stance and re­ceived three years of pro­ba­tion.

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