Category: Daily News

The Orange County District Attorney has refiled a felony complaint against Kareem Ahmed, Andrew Jarminski, Michael Rudolph and Norma Garner. The new filing follows a Court of Appeal victory for the defendants earlier this year. This new filing will be round two of the major legal battle.

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.”

After this ruling by the Court of Appeal, one of the problems prosecutors will face is a claim that the case is now barred by statute of limitations. However the refiled felony complaint alleges that some of the “overt acts” upon which the felony charges are based continue to occur up through April 16, 2016 as the defendants continue to pursue collection of their liens. Prosecutors for example allege that “between 6/27/14 and 12/31/15 Ahmed paid $800,000 in lien activation or filing fees to collect on over $58 millions dollars in false claims generated based on kickbacks to medical providers.” And that “Ahmed employed the Blue Law Group, and Michael Blue, to aggressively collect on these false claims.” And despite “a Court order by the workers compensation appeals board Judge, Norma Garner and Michael Blue, at Ahmed’s direction, continued to hide the terms of Ahmed’s agreements with various physicians and pharmacists on 3/10/16 and 4/14/16 in Case # ADJ2262813, Applicant: Oscar Arreola in order to continue to collect on these false claims”.

it is further alleged by prosecutors pursuant to Penal Code section 803(b) that a previous prosecution of defendants for the same conduct commenced within the meaning of Section 804(a), namely, an indictment or information was filed, and was pending which protects the case from the running of the statute of limitations..

A federal grand jury indicted Dr. Vilasini M. Ganesh and Dr. Gregory Belcher last week for conspiracy to commit health care fraud, health care fraud, conspiracy to commit money laundering, and money laundering. Dr. Ganesh is a family practitioner and Dr. Belcher is an orthopedic surgeon.

According to the indictment, between 2009 and continuing through at least September 2014, Ganesh, 46, of Saratoga, Calif., together with her partner, Belcher, 54, also of Saratoga, engaged in a scheme to defraud insurance companies administering health care benefit programs (“HCBPs”). As alleged in the indictment, Ganesh and Belcher used their Saratoga medical practice, Campbell Medical Group (“CMG”), to unlawfully enrich themselves. Ganesh and Belcher are alleged to have submitted false and fraudulent claims to the HCBPs, concealed the submission of false and fraudulent claims to the HCBPs, and diverted proceeds of the fraud for their personal use. In addition, Ganesh allegedly submitted and caused to be submitted to HCBPs claims for services that she knew were not properly payable because she included (1) false codes that artificially inflated both the seriousness of the patient’s condition as well as the time that the physician spent examining the patient; (2) false diagnoses in the claims that did not correspond with the true health and presentation of the patient; (3) claims for days when the patient had not been seen by the provider; and (4) representations that the patients were seen by another physician provider (not herself) no longer affiliated with Dr. Ganesh and her practice at CMG.

The indictment further alleges that Ganesh compounded these illegal acts by misrepresenting, concealing, and hiding or directing her subordinates to misrepresent, conceal, or hide, acts done in furtherance of the scheme. Specifically, when approached by representatives of the HCBPs, or the patients themselves, to provide documentation or additional information to substantiate the claims that were being submitted at her direction and on her behalf, Ganesh either directed her office staff to have no further discussions with anyone about the claims or to simply resubmit the false information, all to avoid disclosing the truth of the underlying the scheme. Furthermore, the indictment alleges Ganesh, together with the assistance and knowledge of Belcher, submitted hundreds of claims for reimbursement from the HCBPs for: (i) days that were weekends when the CMG office located in Saratoga was closed; (ii) days on which the patient denied they were seen; and/or (iii) days when the patient could not have been seen by Ganesh or her staff because either the patient or the doctor was not physically present in California. The defendants allegedly also used billing codes that indicated Ganesh and/or Belcher had spent more than 24 hours in a single day seeing patients.  The defendants also maintained multiple bank accounts through which they are alleged to have attempted to conceal the nature and source of the illegally obtained funds which resulted from their scheme to defraud.

Defendants were charged with one count of health care fraud conspiracy, in violation of 18 U.S.C. § 1349; one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(b); and six counts of money laundering, in violation of 18 U.S.C. §§ 1956(a)(l)(B)(i) and 2. In addition, defendant Ganesh was charged with five counts of health care fraud, in violation of 18 U.S.C. §§ 1347 and 2, and five counts of false statements relating to health care matters, in violation of 18 U.S.C. § 1035. Both defendants were arrested in Saratoga and made their initial appearance in federal court in San Jose. Both defendants were released on bond, pending further hearings. Bail was set at $250,000 per defendant.

If convicted, the defendants face a maximum sentence of 10 years imprisonment and a fine of $250,000, plus restitution for each violation of 18 U.S.C. §§ 1349 and 1347; and 20 years imprisonment and fine of $500,000 or twice the value of the laundered funds, whichever is greater, plus restitution, for each violation of 18 U.S.C. §§ 1956(h) and 1956(a)(1)(B). However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Amie D. Rooney is prosecuting the case with the assistance of Elise Etter; The prosecution is the result of an investigation by the FBI.

A federal grand jury sitting in Kansas City, Missouri, returned an indictment against a former professional basketball player and representative for the National Basketball Players Association (NBPA), charging him with corruptly interfering with the internal revenue laws, conspiracy to commit wire fraud, obstruction of justice and aggravated identity theft.

It is alleged that Washington referred professional athletes to Ron Mix, a former professional football player and an attorney licensed in the state of California, whose practice focused on the filing of workers’ compensation claims on behalf of former professional athletes.  In exchange for the referrals, Mix made payments to PCA and claimed those amounts as charitable deductions on his personal tax returns.  Upon receipt of these payments, Washington diverted the funds for his own personal benefit.

“The federal indictment alleges this former NBA player used his celebrity status to exploit the good intentions of those who donated to a charity he founded, called Project Contact Africa,” said U.S. Attorney Dickinson. According to the indictment, Washington profited by diverting hundreds of thousands of dollars in donations that was supposed to benefit a clinic in Africa for needy families and children, but instead bankrolled his own personal spending.

It is further alleged that Washington conspired with others to defraud eBay and PayPal, customers and donors of PCA by allowing the co-conspirators to use PCA’s name, tax-exempt status and IRS Employee Identification Number (EIN) with eBay and PayPal so the co-conspirators could avoid substantial listing and registration fees incurred in operating online, for-profit businesses.  Moreover, customers who made purchases falsely believed that 100 percent of the proceeds from the co-conspirators’ online eBay sales benefited PCA.  In exchange for allowing the co-conspirators to use PCA’s tax-exempt status, Washington received payments from the co-conspirators.

Washington was arrested in Los Angeles and had his initial appearance in U.S. District Court in the Central District of California. Washington was ordered to surrender his passport and released on bond and must wear a location monitoring device. Washington’s next court date is tentatively scheduled on June 16 before U.S. Magistrate Judge John T. Maughmer in the Western District of Missouri.

If convicted, Washington faces a statutory maximum sentence of three years in prison on the charge of corrupt interference with the internal revenue laws, 20 years in prison on the charge of conspiring to commit wire fraud, 20 years in prison on the charge of obstruction and a mandatory sentence of two years in prison for the charge of aggravated identity theft, which will be in addition to any other term of imprisonment he receives.  He also faces supervised release, a maximum fine of $250,000 on each count and restitution.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Dickinson commended special agents of IRS-Criminal Investigation, Immigration and Customs Enforcement’s Homeland Security Investigations, who investigated the case and Assistant U.S.  Attorneys Patrick Daly and Curt Bohling of the Western District of Missouri, and Trial Attorney Ryan Raybould of the Tax Division, who are prosecuting the case.

The United States has intervened in a lawsuit against Prime Healthcare Services, the company’s founder and chief executive officer, Dr. Prem Reddy; and 14 Prime hospitals in California that alleges Emergency Departments at Prime facilities improperly admitted patients to the hospitals and submitted false claims to Medicare. Most of these hospitals are in Southern California, including Centinela Hospital Medical Center in Inglewood, Encino Hospital Medical Center, Sherman Oaks Hospital and Huntington Beach Hospital.

The lawsuit alleges that Dr. Reddy, the CEO, directed the corporate practice of pressuring Prime’s Emergency Department physicians and hospital administrators to raise inpatient admission rates, regardless of whether it was medically necessary to admit the patients. The lawsuit alleges that Prime’s corporate officers, at Reddy’s direction, exerted immense pressure on doctors in the Emergency Departments to admit patients who could have been placed in observation, treated as outpatients or discharged. As a result of these medically unnecessary admissions from the Emergency Departments, Prime hospitals allegedly submitted false claims to federal health care programs, such as Medicare.

The lawsuit filed in 2011, United States ex rel. Berntsen v. Prime Healthcare Services, et al., CV11-8214-PJW (MG), was filed in the U.S. District Court in Los Angeles by relator Karin Bernsten, who worked at one of the Prime hospitals where the allegedly improper inpatient admissions took place. She serves as director of performance improvement at Prime’s Alvarado Hospital in San Diego. The lawsuit was filed under the qui tam provisions of the False Claims Act, which permit private parties to sue on behalf of the United States when they believe that a party has submitted false claims for government funds, and to receive a share of any recovery. The False Claims Act permits the government to intervene in such a lawsuit, as it has done in a portion of this case.

Berntsen’s lawsuit describes multiple instances when chain Chief Executive Prem Reddy asked staff to improperly admit patients from the emergency room into the hospital instead of observing them on an outpatient basis. Medicare reimburses hospitals more for patients who are admitted, compared to those who are observed on an outpatient basis and released. Berntsen recounted a January 2011 meeting where Reddy allegedly told doctors that “you can always find a reason to make the (emergency room) patient an inpatient.” Berntsen also alleges that unlicensed “clinical documentation specialists” were coached to exaggerate patient medical conditions in medical records to justify admitting them to the hospital.

The DOJ filing says that since late 2013, investigators have talked to witnesses at different Prime hospitals who said Reddy would demand the firing of ER doctors who passed up opportunities to admit patients into the hospital. Investigators also learned that Reddy told physicians to find a way to admit all seniors older than 65, since they were covered by Medicare.

Prime Healthcare General Counsel Troy Schell said he’s confident the hospital network will be exonerated. “The allegations under investigation arise from complex regulation and a lack of clarity between what federal regulators and physicians believe necessary to adequately document medical necessity for hospital admission,” Mr. Schell said. “Similar investigations have involved almost every major health system and hundreds of hospitals across the country.”

A Glendale doctor has agreed to plead guilty to a federal drug trafficking charge for illegally distributing hydrocodone, a powerful painkiller best known by the brand names Vicodin and Norco.

Dr. Manasseh Nwaigwe, 72, who resides in Glendale and operated a medical office in Boyle Heights, agreed to plead guilty to one count of illegal distribution of hydrocodone. As part of the agreement with the government, Nwaigwe will forfeit to the government more than $97,000 in cash that Nwaigwe admits were proceeds derived from his illegal prescriptions.

In the plea agreement, Nwaigwe admits that, on five occasions in May and July 2015, he wrote prescriptions for drugs to undercover law enforcement officers in exchange for cash.

Nwaigwe prescribed the drugs hydrocodone, clonazepam (commonly known by the brand name Klonopin), and promethazine with codeine (a narcotic cough syrup known on the streets as “purple drank” or “sizzurp”) to undercover agents who “did not in fact have a medical need for those prescriptions.” In exchange, Nwaigwe received $90 cash for each prescription.

Subsequent to the undercover visits, a medical board expert reviewed The CURES report for Respondent, and chose several patients whose prescribing looked suspicious. The expert reviewed patient records for about 12 random patients, which totaled approximately 225 visits. He noticed that there was a pattern with all of these patients, notwithstanding age or sex. The most glaring thing was that every single patient was prescribed the same medications each time they went to see Respondent. They were prescribed a combination of Norco or Vicodin, plus Klonopin or Valium, and Phenergan with Codeine. For each patient, there were no referrals for imaging, physical therapy, urine drug screens or a check of CURES. Each and every patient had the following diagnoses (without evaluations): Chronic Anemia; Hypertension; COPD; UTI or Cystitis; and fatigue/weakness.

Under the terms plea agreement, Nwagiwe will cooperate with the Medical Board of California by surrendering his medical license, which will effectively resolve a pending action filed by the Medical Board against Nwaigwe earlier this year. On March 8, the Medical Board filed an accusation against Nwaigwe that alleged sexual misconduct, prescribing without an appropriate exam and gross negligence.

Under the plea agreement, Nwaigwe also will surrender his DEA registration, which is the federal license that all physicians must have to prescribe controlled substances.

Nwaigwe is expected to appear in United States District Court in Los Angeles on June 7 for an arraignment, at which point a hearing to enter his guilty plea will be scheduled. The drug distribution charge against Nwagiwe carries a statutory maximum penalty of 20 years in federal prison.

The investigation into Nwaigwe was conducted by the Drug Enforcement Administration, the Medical Board of California, the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, the Torrance Police Department, and the Redondo Beach Police Department.