Mimesis Law
25 May 2019

Federal Prosecutor Gets Nailed for Annappareddy Shenaningans

September 9, 2016 (Fault Lines) – For an accused citizen, there is probably no better feeling than getting your conviction overturned and dismissed with prejudice. For a federal prosecutor, there is probably no worse feeling than having a district court judge tell you your actions “shocked the conscience of the court.”

Both happened last week in a federal courtroom in Baltimore, when U.S. District Judge George L. Russell, III, dismissed charges against Reddy Annappareddy with prejudice. Like most health care fraud cases, Annappareddy’s case involved actions related to a dense set of rules and regulations. From the beginning of the case to the end, the prosecutors made sure they had all the advantages.

Annappareddy owned a chain of pharmacies in Maryland. In 2013, he was accused by the feds of concocting a scheme related to refilling prescriptions. Essentially, the pharmacy workers were accused of requesting refills on drugs when customers had those refills remaining, but didn’t actually need a refill. Since no one picked up the refill, the pharmacy would restock the drugs and sell them to somebody else.* The federal government claimed this fraud cost the health care benefits system $2.5 million. The pharmacists were charged with health care fraud and aggravated identity theft.

A jury convicted Annappareddy. Rather than quietly go to jail, he started really fighting at this point. Unlike poor people (or even just regular people), he had the resources to hire new lawyers to attack his conviction in a motion for a new trial. The case quickly crumbled under that onslaught.

It turns out the government either didn’t understand its case, or understood it so well it needed to cheat to win. Annappareddy’s new lawyers saw through it, triggering a hearing in which a federal judge very harshly told the government prosecutors exactly what he thought about their actions.

At trial, a key issue was an email sent by one of Annappareddy’s associates related to returning high-priced drugs that were not needed at the pharmacy. According to testimony from a federal agent, phone records revealed Annappareddy never responded to this e-mail. The government not only argued this silence was an admission, it got the trial judge to instruct the jury the silence could be considered an admission.

The problem with that evidence? It was false. The government presented the wrong phone records, failing to obtain records that reflected the opposite; the defendant had immediately called his associate after the email. Federal prosecutor Sandra Wilkinson agreed the testimony was “incorrect,” but Judge Russell went further.

THE COURT: It’s false. It’s not incorrect. It’s false.

The difference is important, if not critical. Annappareddy was not given the luxury of claiming a mistake, which is what “incorrect” suggests. He was accused of fraud. The government is now in the same boat. It presented false evidence to gain a conviction. Wile the prosecutors argued it was unintentional, let’s see what happens the next time a fraud defendant tries to make that argument. Everything is intentional in a federal courtroom.

Another major piece of evidence against the defendant was the amount of loss. The government used the sheer volume of drugs allegedly obtained as proof there had to be something sinister going on. But there was a problem with that, too.

Apparently, the government initially had one expert calculate a loss amount, which came back significantly lower than the loss amount presented by a different expert at trial. The prosecutors never told the defense about the first loss amount.

The biggest concern with the prosecutors’ actions involved the destruction of evidence. As any good Brady violator knows, the quickest way to shut down a prosecutorial misconduct inquiry is to just destroy the evidence. Argue it was not done in bad faith, and the friendly neighborhood judge tells the defendant too bad, so sad. Pretty hard to prove the prosecutors cheated when they got rid of the evidence. It’s called obstruction of justice when a defendant does it, but when a prosecutor does it, it’s called “not in bad faith.” Pretty much every time.

Except last week. Judge Russell was a more than a little skeptical of AUSA Wilkinson’s claims all of her mistakes were innocent and would not affect a new trial.

Even assuming the defendant possessed all of the raw data related to the losses, he operated at a disadvantage and was not on equal footing with the government.

One of several keys to his defense were, I guess to use an analogy, in a huge haystack, but he wasn’t told that there were even keys or if he was told where to look for them, which the government was obligated to do, as those keys were favorable to the defense.

Judge Russell didn’t mince words in his opinion of the prosecutors’ actions.

The failure to disclosure is in violation of Brady, the history of late disclosures and the promotion of false significant testimony in this case does shock the conscience of this Court.

At this point, the government had apparently conceded a new trial was in order. “Well, sorry we got caught cheating, let’s just have another trial and we swear we will play by the rules this time…”

Not on Judge Russell’s watch. He issued a dismissal with prejudice, which in federal court is the death penalty for a prosecution. And in case his displeasure was not clear enough, he made a not-so-veiled threat to the prosecution about what would happen if his decision was overturned on appeal.

In the event that my record is not clear or exercise of my discretion too broad, this Court will conduct an extensive time-consuming and costly hearing as to these matters and the other grounds supporting the motion to dismiss and other motions which have already been filed.

The federal prosecutor lost and has been told there is no point to an appeal. It’s almost like she is a federal defendant. Pure poetic justice.

But it is more than poetic justice. Judge Russell’s ruling accomplished real live actual justice. He recognized and pointed out the consequences had he failed to act.

There’s some significant evidence that was put before this jury that this gentleman was convicted under, if it weren’t for the resistance of the government in the motion for new trial that, because of that resistance, if I let it go, he’d be in prison right now. He would be in prison.

And the Court would have sentenced him to prison.

But actually, he shouldn’t be in prison, because his constitutional due process rights were violated, and they were violated by mistakes the government made.

Good for Judge Russell. And shame on the federal government. At what point do prosecutors realize that if you can’t win with the evidence you have, maybe you are chasing the wrong case?

* This article references a statement from the U.S. Attorney’s Office. Searching Annappareddy’s name at the Department of Justice website, it appears they have removed press releases related to him. If that was intentional, good for them.

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