In 2014 an Orange County Grand Jury indicted 45-year-old Kareem Ahmed and 14 others, alleging he formulated topical creams and oversaw an extensive network of kickbacks that paid doctors and pharmacists more than $25 million to prescribe and distribute the products. Ahmed, president of Ontario company Landmark Medical Management, and the others faced a total of 44 counts on felony charges including conspiracy, trading rebates for patient referrals, insurance fraud and involuntary manslaughter, according to the original two grand jury indictments. The amounts individual doctors received between 2010 and 2013 allegedly ranged from $600,000 to more than $2.5 million. Among those Ahmed allegedly paid were Daniel Capen, M.D. (more than $2.5 million); Andrew Jarminski, M.D. (more than $1.9 million); pharmacist Michael Rudolph (more than $1 million); and Rahil Kahn, M.D. (more than $1 million), according to the indictment.
The grand jury was instructed that it had to unanimously find a defendant committed only a single act encompassed within the count to return a true bill on that count. After the grand jury found the indictments to be true, defendants demurred in the trial court, resulting in the People amending the indictments to add hundreds of new counts – a separate count for each victim – and adding an additional allegation in a single count of involuntary manslaughter.
The defendants moved to set aside the amended indictments on the ground the grand jury had not made separate findings as to each victim, but instead had been instructed to find only one act. Defendants posited that the amendments thus impermissibly changed the offenses charged by the grand jury in violation of Penal Code section 1009. As to the involuntary manslaughter count, the defendants contended the new allegation, embedded in the single charge of involuntary manslaughter, also impermissibly changed the offense charged by the grand jury. The court denied the motion.
The Court of Appeal reversed and remanded in the case of Kareem Ahmed v Superior Court.
The Court of Appeal ruled that “there is no logical basis upon which we can conclude that the grand jury made a finding as to each of the new counts in the amended indictment. The additional counts are new offenses, not shown to be found by the grand jury, and thus changed the offenses charged in violation of section 1009. Accordingly, the indictment was ‘not found, endorsed, and presented as prescribed in’ the Penal Code….. Based on our conclusion that adding multiple counts of insurance fraud changed the offense charged in violation of section 1009, we will grant the petition for writ of mandate setting aside most of the charges in the two indictments.”
The trial court was ordered to issue a new order granting the motion with respect to all counts in the Charbonnet indictment except counts 1, 298, and 323, and all counts in the Ahmed indictment except count 1. The court is further directed to, at the prosecutor’s election, order the case resubmitted to a grand jury pursuant to sections 997, 998, and 1009. Count 1 is a conspiracy charge not addressed in this writ petition. Counts 298 and 323 repeated counts 30 and 33 from the original indictment, which alleged violations with respect to a single victim during a timeframe entirely within the statute of limitations.
The defendants had argued that the indictments alleged conduct outside the statute of limitations. In particular, defendants argued the statute of limitations for violations of section 549 and Business and Professions Code section 650 is three years (§ 801), and the statute of limitations for a violation of section 550 is four years (§§ 801.5, 803, subd. (c)(6)). With the indictments being filed on June 17, 2014, defendants argued they cannot be tried for conduct prior to June 17, 2011 and June 17, 2010, respectively.
At this point it is not clear how much of this major case remains. After remand the district attorney will have an opportunity to attempt to resurrect part of its case. It is not known at this time how successful this will be.