From the U.S. Attorney’s Office in Baltimore:
A federal grand jury has indicted Reddy Vijay Annappareddy, age 45, of Fallston, Maryland; Vipinkumar Patel (V. Patel), age 30, of Edgewood, Maryland; and Jigar Patel (J. Patel), age 27, of Columbia, Maryland, on charges of health care fraud and aggravated identity theft in connection with a scheme to defraud Medicaid and Medicare by submitting false claims for prescription refills. The indictment was returned on July 23, 2013, and unsealed on July 25, 2013, upon the arrest of the Patels and the execution of search warrants at six locations, including three pharmacies and a storage space. The Patels had detention hearings today in federal court in Baltimore and were released under the supervision of U.S. Pretrial Services. No court appearance has been scheduled yet for Annappareddy.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Maryland Attorney General Douglas F. Gansler; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge Drew Grimm, Office of Personnel Management, Office of Inspector General; Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; and Acting Inspector General Lynne M. Halbrooks of the U.S. Department of Defense, Office of Inspector General.
Annappareddy owns Pharmacare, LLC and Caremerica, LLC, a pharmacy store chain doing business in Maryland and elsewhere. J. Patel and V. Patel met when they worked at Pharmacare located at 208 Plumtree Road and at Caremerica located at 2227 Old Emmorton Road, both in Bel Air, Maryland.
The two count indictment alleges that from at least 2007 to July 2013, the defendants would identify customers who filled prescriptions at the pharmacy and for whom prescription refills remained. As soon as a prescription was eligible for refill, the defendants allegedly caused entries to be made in the pharmacy software to reflect that the refill had been requested, when in fact the refill had not. Such a computer entry would then be used to support a claim for reimbursement by the relevant health care benefit program, such as Medicare and Medicaid. The defendants would cause a false claim to be electronically submitted to a health care benefit program for a prescription refill that had not been requested or dispensed. They allegedly used the actual name and insurance and identification number of hundreds of customers. The defendants would allegedly also re-use the prescription drug refills that were not delivered or picked up by a customer by, among other things, re-stocking the inventory in the pharmacy.
The indictment alleges that the defendants personally profited from the fraud scheme, and that the loss to the health care benefit programs to date is approximately $2.6 million.
The defendants face a maximum sentence of 10 years in prison for health care fraud and a mandatory minimum of two years in prison consecutive to any sentence imposed for aggravated identity theft, plus a $250,000 fine.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the Medicaid Fraud and Control Unit of the Office of the Maryland Attorney General, FBI, OPM, HHS – OIG and DOD – OIG for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Sandra Wilkinson, Richard Kay and Michael DiPietro, and Special Assistant United States Attorney Catherine Pascal of the Medicaid Fraud Control Unit of the Maryland Attorney General’s Office, who are prosecuting the case.