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Jigar Patel

Other Federal Fraud Exonerations
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In July 2013, a federal grand jury in Maryland indicted Reddy Annappareddy on charges that he bilked Medicaid, Medicare, and private insurers out of millions of dollars by submitting fraudulent billings for prescriptions filled by pharmacies he owned in Maryland and Washington, D.C.

The pharmacies, operating under the names Caremerica and Pharmacare, were accused of submitting bills for drugs that were prescribed, but never actually dispensed to patients.

Ultimately, a pharmacist, Venkata “Sri” Mannava, and two pharmaceutical technicians, Jigar Patel and Vipinkumar Patel, also were charged with approving and submitting the billings.

Mannava had come under suspicion in 2011 after federal agents arrested Dagnachew Afsaw when he tried to fill a forged prescription for Oxycontin, a powerful and addictive painkiller that is in high demand on the black market. Federal agents discovered that between December 2010 and October 2011, Mannava, working at one of Annappareddy’s pharmacies in Washington, D.C., had filled 631 prescriptions for Afsaw involving nearly 150,000 Oxycontin pills. Afsaw had paid more than $200,000 in cash for the prescriptions, some of which were made out in the names of real patients and some of which bore fictitious names.

During that time, federal authorities were already investigating Annappareddy’s pharmacies based on a complaint made by a former employee who alleged that the pharmacies were submitting bills for prescriptions that were not dispensed to certain patients. The employee had resigned and became angry after he was denied worker’s compensation. He filed a complaint with the Maryland Attorney General’s office, and gave the names of five patients whom he said Annappareddy had billed for medication, but who did not receive it. Although four of the patients were interviewed and all said they had received their medications (the fifth was not interviewed), the U.S. Attorney’s Office and the FBI in Baltimore, Maryland began an investigation. Ultimately, agents raided a Maryland home owned by Annappareddy’s wife. Investigators said they seized binders with “delivery logs signed in blank.”

The prosecution alleged that prescriptions that were not dispensed to patients were resold. The bills “were not timely reversed when the prescription drugs were not actually dispensed, delivered or picked up by a customer,” according to the charges.

In November 2014, Annappareddy went to trial in U.S. District Court in Baltimore. By that time, Mannava as well as Jigar and Vipinkumar Patel had pled guilty to making a false statement to the federal government in the form of billings for prescriptions. In addition, Mannava also pled guilty to conspiring to illegally dispense controlled substances arising from the forged Oxycontin prescription scheme.

The prosecution presented evidence that among the seized items were drugs that were not dispensed, but for which Annappareddy had billed and been paid.

A federal government auditor, Mary Hammond, testified that she calculated the total number of pills of each of 36 medications that Phamacare’s ten stores purchased from December 1, 2006 through October 21, 2012. Hammond then calculated the total number of pills that were represented by billings the stores submitted during that time. Hammond testified that she then subtracted the number of pills purchased from the number of pills billed for to ascertain what she called a “shortage” of pills. Finally, she calculated a per pill cost based on an average price paid by Maryland Medicaid and told the jury that the loss to the government for pills that were not dispensed totaled nearly $4.6 million.

Two days after her testimony, Hammond came back to the witness stand to change her testimony. She said she had subsequently learned that the District of Columbia supplied HIV medications to certain pharmacies, including Pharmacare. As a result, she said, there was no shortage at the District of Columbia Pharmacare, and she therefore revised the loss downward from nearly $4.6 million to $2.4 million.

The prosecution contended that Annappareddy had a policy of automatically refilling prescriptions when they came time to be refilled—whether the patients requested refills nor not—and automatically sending bills to the government and private insurers. The “auto-refill scheme” was proof of fraud, the prosecution told the jury.

In closing argument, the prosecution argued that Hammond’s loss calculations were “the most significant evidence” in the entire case.

On December 17, 2014, Annappareddy was convicted on three counts of health care fraud. The prosecution sought forfeiture of his home and assets, including the pharmacies. His trial lawyer filed a three-page motion requesting a new trial.

While that was pending, Annappareddy retained a new legal team headed by attorneys from the Washington, D.C. law firm of Womble Carlyle Sandridge & Rice. They began re-investigating the case and hired an auditor to review Hammond’s findings—something that Annappareddy’s trial lawyer had failed to do.

In September 2015, Schamel and Greenberg filed a supplement to the motion for new trial. They noted the wide variability in the prosecution’s experts’ own accounting of the same data. Up until four months before Annappareddy’s trial, the prosecution had been working with a team of outside experts (MEDIC) to calculate the purported “loss” to government insurance programs. In January 2014, the prosecution had provided to the defense a rough estimate of more than $13 million in losses calculated by MEDIC. The prosecution also told Annappareddy's defense lawyer that “the same data” existed for two different insurers and indicated that MEDIC had double-counted those data, artificially inflating its loss calculation—an indication that the prosecution was aware at that time that the possibility of double-counting existed.

In July 2014, the prosecution dumped the MEDIC team and switched to Hammond, an internal government auditor. The prosecution said that MEDIC was “unable to summarize/analyze the data in the way we requested.”

However, the prosecution’s decision to replace MEDIC with Hammond’s services did not solve the double counting problem. The motion for new trial said that a team of auditors hired by the defense had gone through the records and determined that there was no shortage at all. In fact, there was a surplus.

Hammond’s figures, the motion said, were based on “a series of massive counting errors,” including double counting of some prescriptions, in some cases multiple times. Eliminating the multiple counting reduced Hammond’s loss calculation by $2.4 million, the motion said.

By factoring in other errors, including the supplying of HIV medications in the Washington, D.C. pharmacy, the defense expert calculated there was a surplus of $753,000.

The motion said that Annappareddy’s trial defense attorney had provided an inadequate legal defense by failing to hire an independent auditor to analyze Hammond’s conclusions. In addition, the motion said that the trial defense lawyer had failed to called witnesses who could have testified that automatically refilling a prescription was appropriate. The witnesses would have testified that many of the prescribers requested and authorized automatic refills for patients, particularly those with HIV who needed to get their prescriptions without interruption to maintain adequate levels of the medication.

In June 2016, after the prosecution conceded that Hammond’s calculations were incorrect, U.S. District Judge George Russell III granted the motion for a new trial.

As Greenberg and Schamel began preparing for the retrial, they discovered that prior to Annappareddy’s trial, the prosecution was aware of the potential for double counting, but failed to do something about it.

In addition, the defense discovered that the jury had been misled when a federal agent testified that Annappareddy, after receiving an email from Jigar Patel concerning prescribing policies, failed to even call Patel back. The prosecution had argued at Annappareddy’s trial that his failure to contact Patel showed Annappareddy’s criminal intent. In fact, the defense got phone records that showed that Annappareddy had called Patel five times that day. The prosecution later conceded that the agent checked the internal database of phone records, but failed to realize that the phone records for the time period in question had never been uploaded to the internal database because the FBI never got the records in the first place.

The lead prosecutor, Sandra Wilkinson, subsequently admitted in court, “We never got them because we subpoenaed the wrong service provider.”

The defense also discovered that the prosecution had failed to disclose to the defense that the former employee’s initial complaint about Annappareddy had been investigated and no wrongdoing had been found.

By examining photographs taken by the FBI during the raid, the defense discovered that the drugs presented in evidence at Annappareddy’s trial as proof that he had billed for medicines that were not delivered were in fact recovered from a medical waste bag that was supposed to be incinerated. The agents had taken the pills from the bag, put them back into the bubble wrap, and presented them at the trial. In fact, the defense learned, the medical waste bag contained drugs from more than 10 other pharmacies not connected to Annappareddy. The drugs had been dispensed to a clinic, but expired after the patients failed to pick them up, and had to be destroyed. Annappareddy had agreed to help clinic employees by properly disposing of the drugs for them.

The defense also discovered that the prosecution had destroyed four boxes of pharmacy records without defense permission. These boxes contained logs showing the names of customers and dates of prescriptions—evidence Schamel and Greenberg considered critical to defending Annappareddy at a retrial.

The defense lawyers filed a motion asking that the case be dismissed due to the prosecutorial misconduct.

In September 2016, Judge Russell granted the motion and dismissed the charges against Annappareddy. Although prosecutor Wilkinson said she thought the defense had consented to the destruction of the evidence, Judge Russell said the actions “shock the conscience of this court.”

The prosecution said it would appeal the ruling, but a month later, after initially filing a notice of appeal, the appeal was dismissed.

Meanwhile, lawyers for Jigar and Vipinkumar Patel and Mannava moved to withdraw their guilty pleas.

On March 9, 2017, the prosecution dismissed the charges against Annappareddy. It also consented to Jigar and Vinpinkumar Patel withdrawing their guilty pleas and dismissed the charges against them.

On April 26, 2017, after the prosecution agreed to allow Mannava to withdraw his guilty plea to making a false statement, that charge was dismissed. His conviction for the forged Oxycontin prescription scheme remained intact.

– Maurice Possley

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Posting Date: 6/1/2017
State:Fed-MD
County:
Most Serious Crime:Fraud
Additional Convictions:
Reported Crime Date:2013
Convicted:2014
Exonerated:2017
Sentence:1 year and 1 month
Race:Asian
Sex:Male
Age at the date of crime:27
Contributing Factors:Official Misconduct
Did DNA evidence contribute to the exoneration?:No