People v Khan

[*1] People v Khan 2009 NY Slip Op 51685(U) [24 Misc 3d 1231(A)] Decided on July 17, 2009 Supreme Court, New York County Kahn, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on July 17, 2009
Supreme Court, New York County

The People of the State of New York,

against

Saleem Khan, Defendant.



3299/2008



For the defendant:

Neil B. Checkman, Esquire

Law Offices of Neil B. Checkman

11 Broadway, suite 1305

New York, New York 10006

For the prosecution:

Albert Berry III, Esquire

Assistant District Attorney

New York County District Attorney's Office

One Hogan Place

New York, NY 10013

Marcy L. Kahn, J.

On May 28, 2009, defendant Saleem Khan was convicted after trial by jury of grand larceny in te third degree (PL §155.35), health care fraud in the fourth degree (PL §177.10) and criminal diversion of prescription medications in the fourth degree (PL §178.10) (five counts). This court reserved decision on defendant's motions made at the conclusion of the prosecution's case and after presentation of all of the evidence for a trial order of dismissal pursuant to CPL §290.10(1). After the jury's rendition of its verdict, this court requested, and has subsequently received, letter briefs from the People and defendant on issues relating to those motions. For the reasons stated below, the court now grants in part and denies in part said motions.

I.THE EVIDENCE AT TRIAL

Defendant was charged in a seven-count indictment[FN1] with grand larceny, health care fraud and criminal diversion of prescription medications for allegedly defrauding the New York City Human Resources Administration and its Medicaid benefits program of more than three thousand dollars ($3000) and unlawfully dispensing prescription medications on seven separate occasions. The evidence at trial established that in the fall of 2007, as a result of having received a tip, the Manhattan North Narcotics Division of the New York Police Department commenced an undercover investigation into allegations that individuals working at the NYC Pharmacy, located at 2258 Third Avenue in Manhattan, were selling prescription medications without requiring prescription orders.

In the course of that investigation, over the ensuing nine months, undercover Detective Pedro Gomez[FN2] visited NYC on seven occasions and received pills from the defendant, who worked in the pharmacy department at NYC Pharmacy. On four of those occasions (November 15, 2007, November 21, 2007, February 1, 2008 and May 21, 2008), Gomez requested Amitriptyline and Clonidine from Khan and received pills from him in exchange for U.S. currency, without providing any prescriptions. On the other three occasions (February 28, 2008, March 6, 2008 and April 2, 2008), Gomez proffered prescriptions in the name of "Ivonne Arroyo" and received pills from defendant, for which the Medicaid program was ultimately billed.

Specifically, the evidence at trial established that on November 15, Gomez entered the pharmacy and requested of defendant's co-worker, "JD Colombia,"[FN3] 40 pills of Amitriptyline and 40 pills of Clonidine. JD Colombia told him it was too many pills to be dispensed without a prescription and said he had to call his boss. JD Colombia went to the rear of the store and spoke with defendant. Shortly thereafter, defendant and JD Colombia returned to Gomez and Khan told him, "It's a federal [*2]crime to sell, give out, these pills without a prescription. I could lose my job, you know." (Transcript of trial [Tr.], May 22, 2009, at 91). Khan then asked Gomez whether he had a prescription for the pills, and the officer replied that he did not. At that point, Khan agreed to provide 20 pills of each type. JD Colombia handed two bottles of 20 pills each to Gomez, who gave him $40 of pre-recorded buy money in exchange. Gomez returned to his command and vouchered the pills for analysis.

On November 21, Gomez returned to NYC Pharmacy and requested 20 pills each of Amitriptyline and Clonidine from JD Colombia, and again did not provide any prescription. JD Colombia spoke to defendant, whom Gomez then observed counting out pills in the rear of the pharmacy. A few minutes later, JD Colombia returned to Gomez and handed him two envelopes, each containing 20 pills, and Gomez gave JD Colombia $40 in pre-recorded buy money. Gomez again returned to his command and vouchered the pills for analysis.

On February 1, Gomez returned to NYC Pharmacy and approaching JD Colombia, requested 20 pills of Amitriptyline and 20 pills of Clonidine, again without providing a prescription. JD Colombia responded that he could not sell the pills without a prescription, but went to the rear of the store to speak with defendant, whom he characterized as his "boss." Defendant approached Gomez, queried whether he was a police officer, and after receiving assurances from Gomez, took $40 from him, went to the rear of the store and soon thereafter returned with 40 pills in a prescription bottle which he handed to Gomez. Gomez followed the same procedures of returning to his command and vouchering the pills for laboratory analysis.

On February 28, Gomez entered NYC Pharmacy with a prescription in the name of "Ivonne Arroyo" for 30 Zyprexa pills and approached JD Colombia, telling him that he wanted Amitriptyline and Clonidine instead of the prescribed medication. JD Colombia took Gomez to Khan, who told him not to approach anyone else "with this kind of thing." (Tr., at 98). The officer requested 40 pills each of Amitriptyline and Clonidine. Khan said, "Thirty, yeah. Thirty I can give you."

(Transcript of recorded conversation Feb. 28, 2008, Peo. Exh. 3A, at 7). After further negotiation, Khan provided 20 pills of each of the two requested drugs to Gomez, who removed them to the station house and vouchered them for testing.

The officer again went to NYC Pharmacy on March 6, with a prescription for 30 Sustiva pills, again made out to Ivonne Arroyo, and told defendant that he actually wanted "the usual pills that [he] was getting in the past." (Tr., at 104). Defendant gave Gomez a brown paper bag containing a prescription bottle labeled "Sustiva." Gomez testified that the pills looked like the ones he had received on his previous visits to the [*3]pharmacy.

On April 2, Gomez returned to the pharmacy with prescriptions in the name of "Ivonne Arroyo" for 30 Epzicom pills, 120 Prezista pills and 60 administrations of Advair, but again requested that defendant Khan provide him instead with other drugs, this time including Percocet as well as Amitriptyline and Clonidine. (Tr., at 105-06). Defendant responded that he could provide the other pills, but not the Percocet, because it contains codeine and is a controlled substance. (Transcript of recording of conversation Apr. 2, 2008, Peo. Exh. 2A, at 4). When Gomez requested the other pills, Khan said, "Okay" (id., at 7), and 40 pills were provided, which Gomez later vouchered.

With respect to these last three transactions for which the undercover furnished prescriptions in the name of Ivonne Arroyo, NYC Pharmacy submitted claims for reimbursement from the Medicaid system, as follows: for February 28, a claim was submitted for 30 units of Zyprexa in the amount of $706.55; for March 6, the claim was made for 30 units of Sustiva in the amount of $519.04, and for April 2, the claim totaled $1847.88, for 30 units of Epzicom ($812.89), 120 units of Prezista ($884.28) and 60 units of Advair ($150.71). These claims together totaled $3073.47. (See Peo. Exh. 4).

On May 21, the undercover again entered NYC Pharmacy with two prescriptions, again requesting that defendant provide instead Percocet, Amitriptyline and Clonidine. (Tr., at 108-09).

Defendant balked, saying that he could not bill Medicaid for the transactions because the medications were not properly registered in the computerized system by the prescribing doctor

(Tr., at 109). After further conversation, Khan agreed to provide Amitriptyline and asked Gomez whether he wanted Clonidine as well, to which the undercover replied, "Okay, I'll buy some." (Tr., at 110). Defendant then gave Gomez 60 pills in exchange for $20, although no description of the pills was offered at trial. Gomez again vouchered the pills for testing.

Notwithstanding the habit of Gomez in vouchering the pills he had received from Khan on each occasion and forwarding them to the police laboratory for testing, and the ensuing retention and safeguarding of all of the pills by the police and prosecution, resulting in their introduction in evidence at trial (Peo. Exhs. 5-9), no laboratory analysis was ever undertaken of any of the pills, nor did the People proffer at trial any witness to identify the pills based upon experience or training. Furthermore, while Kimberly McKie, a fraud investigator for the Human Resources Administration, testified that Amitriptyline and Clonidine are "relatively inexpensive" prescription medications compared to the five medications for which NYC Pharmacy billed Medicaid (Tr., at 38-40), no evidence of the value at which [*4]Medicaid would provide reimbursement for the former medications was presented.

II.ISSUES PRESENTED

At the conclusion of the People's case and at the close of all of the evidence, defendant moved for a trial order of dismissal based upon the insufficiency of the evidence. His counsel raised numerous arguments addressed to the first three counts of the indictment, including claims that the proof was legally insufficient to support findings that Khan caused the Medicaid system to be billed for the prescriptions or that Khan intended to wrongfully obtain reimbursement monies from Medicaid; that the grand larceny occurred, if at all, subsequently to the dates charged in the indictment; and all of the counts were deficient because no evidence was introduced of the nature of the pills received by Gomez (Tr. May 26, 2009, at 235-42). The court reserved decision and submitted all counts to the jury.[FN4]

After deliberating for approximately eight hours over two days, the jury announced its verdict as set forth above. The court continued to reserve decision on the CPL §290.10 motions with respect to two issues, as to which it directed the parties to file letter memoranda: first, the legal sufficiency of the evidence that the moneys wrongfully obtained exceeded $3000 for purposes of the counts of grand larceny in the third degree and health care fraud in the fourth degree, and second, the legal sufficiency of the proof of the character of the pills dispensed as prescription medications for the purpose of proving that element of the counts of criminal diversion of prescription medications. The balance of defendant's motions were deemed denied. Thereafter, the parties submitted letter memoranda to the court.

III.DISCUSSION

A.CPL §290.10 legal standard

Section 290.10 of the Criminal Procedure Law permits the court on motion of the defendant at the conclusion of the People's case or at the conclusion of all of the evidence to issue a trial order of dismissal dismissing any count of the indictment on the ground that the evidence is not legally sufficient to establish the offense charged or any lesser included offense. (CPL §290.10[a]). Where the court has reserved decision on the motion and then grants it after the jury has [*5]rendered a verdict of guilty, the court must set aside the verdict on that count and dismiss the count. (CPL §290.10[b]). "A trial order of dismissal must be denied where the trial evidence, when viewed in the light most favorable to the People, was legally sufficient to support a guilty verdict with respect to the charged offense or a lesser included offense." (People v. Phillips, 256 AD2d 733, 735 [3d Dept. 1998]).

B.Value of benefit wrongfully obtained

The issue as to value relates to counts one and three, corresponding to the transactions on February 28, March 6 and April 2, for which prescriptions were presented and Medicaid reimbursed NYC Pharmacy (see Def. Exh. B; Peo. Exh. 4) in the amount of $3073.47.

1.Grand larceny in the third degree (PL §155.35)

Defendant argues that absent evidence of the value of the pills which were actually provided, the finder of fact could not determine how much of the $3073.47 reimbursed by Medicaid was wrongfully obtained, resulting in a failure of proof as to the value element of grand larceny in the third degree.[FN5] His argument is essentially a "net receipt" theory, premised on the notion that the jury's finding of the amount wrongfully obtained must be the arithmetic difference between the reimbursement value of the pills for which Medicaid was billed and the corresponding value of the pills actually provided. From the absence of proof of the value of the pills actually dispensed, he concludes that the proof is legally insufficient to establish that the value of the property wrongfully obtained exceeded $3000, and the court should set aside the jury's verdict on the grand larceny count [*6]and dismiss it.

The People counter that because none of the medications listed in the prescriptions and for which Medicaid issued reimbursement were among the pills provided, the entire amount of reimbursement was wrongfully obtained.

Grand larceny in the third degree is established when the actor wrongfully obtains property from its owner and the value of the property exceeds $3000. (PL §155.35). Here, evidence was presented that defendant, his accomplice, JD Colombia, and their employer, NYC Pharmacy, wrongfully obtained $3073.47 from Medicaid by falsely submitting claims for having filled the five Ivonne Arroyo prescriptions. The entire amount of this reimbursement was wrongfully and fraudulently obtained, since no medications were ever given to the 37-year old woman named in the five prescriptions. Khan's giving a quantity of pills to Gomez in exchange for Arroyo's prescription does not make any portion of the $3073.47 lawfully obtained: the entire transaction was a fraud, and NYC Pharmacy was not entitled to any reimbursement whatsoever for it. Moreover, it is well-settled that the value of stolen property may be aggregated to achieve the statutory threshold, if each instance of theft is part of the same corrupt scheme or plan. (People v. Rossi, 5 NY2d 396 [1959]; People v. Rosich, 170 AD2d 703 [2d Dept.], lv. denied, 77 NY2d 1000 [1991]). Accordingly, defendant's motion for a trial order of dismissal as to count one is denied.

2.Health care fraud in the fourth degree (PL §177.10)

Defendant raises a similar argument with respect to count three, namely, that without evidence of the price of the pills the undercover received, there is no way to calculate the undue gain to defendant and the value element of health care fraud in the fourth degree is legally unsupported.[FN6] He further argues [*7]that because there was no proof of what medications were actually provided to Gomez, the jury had no basis for concluding that the transaction was, in fact, fraudulent.

The People, again, argue that the entire amount of the payment was wrongfully received, as the reimbursement by Medicaid was for drugs which were not properly dispensed. They further maintain that because the undercover, upon presenting the prescription on each occasion, asked to be given pills other than those ordered in the prescription, the evidence was legally sufficient to support a finding by the jury that the medications dispensed were not those on the prescription slips. From this they reason that the defendant and NYC Pharmacy were not entitled to any portion of the $3073.47 reimbursement paid by Medicaid.

Health care fraud in the fourth degree is committed when, with intent to defraud a health care plan, the actor knowingly and willfully provides materially false information for the purpose of requesting payment from the health plan for a health care item, and as a result of such information, the actor or another receives payment in an amount to which the actor is not entitled, and the portion of the payment wrongfully received from a single health plan in the period of a year exceeds $3000.

The evidence supports the People's claim insofar as it is clear that none of the pills provided were the Advair Diskus for which reimbursement was sought. More importantly, none of the Arroyo prescriptions was legitimately submitted, filled or processed for payment, since they were not dispensed to the 37-year old female, Ivonne Arroyo, named in the prescriptions and in the documentation submitted to Medicaid. Thus, the defendant, intending to defraud Medicaid, knowingly and willfully provided materially false information in order to deceive Medicaid and receive payments which were unjustified. Again, the entire amount NYC Pharmacy and defendant received in reimbursement for Arroyo's prescription slips was wrongfully received. Accordingly, defendant's motion to dismiss this count is denied.

C.Proof of prescription medication

The second issue to be determined is whether the evidence was legally sufficient to support the prosecution's claim that the pills dispensed by defendant to Gomez were prescription medications, satisfying that element of the crime of criminal [*8]diversion of prescription medications in the fourth degree[FN7] (PL §178.10), of which defendant stands convicted under counts two,[FN8] four, five, six and seven. Defendant argues that there is no reliable basis for inferring the nature of the pills provided, as no laboratory testing was conducted, no physician, pharmacist, appropriate law enforcement officer or other expert was called to identify them, and there was no testimony from a lay witness familiar with these drugs who could identify them based upon prior usage of them.

The People maintain that the circumstantial evidence amply supports this element of the crime. They point to the behavior and conversation of defendant as reflected on the audio (Peo. Exh. 3A) and video (Peo. Exh. 2A) recordings of his February 28 and April 2 encounters with Gomez; to the testimony of Gomez that he always received the same type of pills from Khan; and to the furtive nature of the parties' conversations as tending to show that the pills provided were prescription drugs.

"[I]n a drug-related prosecution, the People's case is legally sufficient if the evidence provides a reliable basis' for inferring the presence" of the drug. (People v. Swamp, 84 NY2d 725, 730 [1995], citing People v. Kenny, 30 NY2d 154, 157 [1972]). Expert testimony is sufficient, but not necessary, for [*9]this purpose. "More than conclusory assertions" are required, however, to meet the legal sufficiency standard. (Id., [additional citation omitted]). That said, the substance itself need not be produced at trial (People v. Czarnowski, 268 AD2d 701, 702 [3d Dept. 2000]), nor need it necessarily have been subjected to laboratory analysis, the results of which are introduced at trial. (People v. Houston, 72 AD2d 369, 379 [2d Dept. 1980]). The nature of the drug may be proved circumstantially (id.), and where the substance is not available for analysis, consumers who are familiar with the substance, from their own actual use of the drug, or from observation or study, may be competent to give testimony identifying it. (People v. Lynch, 85 AD2d 126, 128 [4th Dept. 1982]; see People v. Christopher, 161 AD2d 896 [3d Dept.], lv. denied, 76 NY2d 786 [1990]). "The test . . . in situations where the illegal substance is not available for analysis, is the experience of the witness and the nature of [his or her] qualifications to identify the substance at issue." (People v. Lynch, supra, 85 AD2d at 128). Where purchasers of prescription medication merely offer conclusory statements as to the nature of the drug, the evidence is insufficient to establish its identity. (People v. O'Neill, 285 AD2d 669 [3d Dept. 2001]). While a pharmacist may offer expert testimony identifying a drug by its physical appearance, based upon his or her training and experience (People v. Czarnowski, supra), the prosecution's reliance solely on identifying statements made by a defendant is insufficient to prove the nature of the drug, absent corroborating evidence. (People v. Ross, 12 Misc 3d 755, 760 [Crim. Ct. Kings Co. 2006] [citing CPL §60.50]).

Here, the People invoked none of these permissible pathways to proving the essential element of counts two, four, five six and seven that the pills provided to Gomez were prescription medications. Although the People retained possession of all of the pills, and most of them were introduced into evidence during the trial, inexplicably, no laboratory analysis was ever conducted, notwithstanding the vouchering of the pills by Gomez precisely for that purpose. Neither did the People proffer a pharmacist or other professional to opine, based upon training and experience, that the pills Khan provided were prescription medications. Defendant Khan never characterized the pills, and Undercover Officer Gomez said no more than that all of the pills looked alike. He made clear that this was his first involvement with the substances in question, and he certainly could not identify Amitriptyline or Clonidine from his training or experience. His characterizations of them as such were merely conclusory. Although investigator Kimberly McKie testified that she was familiar with these medications, she was never asked to identify the pills recovered by Gomez. And with respect to the [*10]People's claim that the transactions were conducted in a furtive manner, this contention is, first of all, untrue, since they always occurred during the store's regular business hours, and second, without more, falls short of proving that the pills were, in fact, prescription medications.

Under these circumstances, there was not a "reliable basis" from which the jury could conclude that the pills given to Gomez by defendant were prescription medications, and the evidence of that element of the counts charging criminal diversion of prescription medications in the fourth degree is legally insufficient to establish that charge or any lesser included charge. Accordingly, counts two, four, five, six and seven must be dismissed.

IV.CONCLUSION

For the reasons stated, defendant's motion for a trial order of dismissal is denied as to counts one and three, and is granted as to counts two, four, five, six and seven.

The foregoing constitutes the decision and order of this court.

E N T E R:

_______________________

Marcy L. Kahn, J.S.C.

Dated: New York, New York

July 17, 2009

Footnotes

Footnote 1: Count two of the indictment charged defendant with criminal diversion of prescription medication in the second degree (PL §178.20). The jury acquitted the defendant on that count, as well as on a lesser included count of criminal diversion of prescription medication in the third degree (PL §178.15[1]), but convicted on the further lesser included count of criminal diversion of prescription medication in the fourth degree (PL §178.10), as previously noted.

Footnote 2: The name is a pseudonym, authorized to be used after this court held a hearing held pursuant to People v. Waver, 3 NY3d 748 (2004), and People v. Stanard, 42 NY2d 74 (1977).

Footnote 3: Defendant's co-worker was separately charged.

Footnote 4: Under count one, charging grand larceny in the third degree, the court also submitted the lesser included offenses of grand larceny in the fourth degree and petit larceny, and under the second count, charging criminal diversion of prescription medications in the second degree, the court also submitted as lesser included offenses the third and fourth degrees of that crime.

Footnote 5:This court charged the jury that in order to find defendant guilty under PL §155.35, the People had to prove, beyond a reasonable doubt, the following three elements:

1.That during the period from on or about February 28, 2008 through April 7, 2008, in the County of New York, the defendant, Saleem Khan, wrongfully took, obtained, or withheld money from its owner;

2.That the defendant did so with the intent to deprive another of the property or to appropriate the property to himself or to a third person; and

3.That the value of the property exceeded $3000 dollars.

The court also instructed the jury that if it found, beyond a reasonable doubt, that the defendant acted pursuant to a single intent and execution of a common fraudulent scheme or plan to deprive Medicaid of property, the jury could consider the sum total of the value of separate takings in the aggregate as a single larceny.

Footnote 6:The court charged the jury on this count that before it could convict, it had to conclude, beyond a reasonable doubt, that the People had proven the following four elements:

1.That during the period from on or about February 28, 2008 through April 7, 2008, in the County of New York, the defendant, Saleem Khan, on one or more occasions, knowingly and willfully provided materially false information or omitted material information for the purpose of requesting payment from a health plan for a health care item or service;

2.That the defendant did so with intent to defraud a health plan;

3.That as a result of such false information or omitted material information, he received payment in an amount that he was not entitled to under the circumstances; and

4.That the payment or portion of the payment wrongfully received from a single health plan, in a period of not more than one year, exceeded $3000 in the aggregate.

Footnote 7:The court charged the jury on this count that before it could convict, it had to conclude, beyond a reasonable doubt, that the People had proven the following four elements:

1.That during the period from on or about February 28, 2008 through April 2, 2008, in New York County, the defendant, Saleem Khan, transferred or delivered, to undercover detective Pedro Gomez, in exchange for something of monetary value, certain prescription medications;

2.That the defendant did so knowingly;

3.That the defendant made such transfers with the knowledge, or with reasonable grounds to know, that Pedro Gomez had no medical need for such prescription medications; and

4.That the value of the benefit which the defendant received by so doing exceeded $3000.

Footnote 8:While the inconsistency in the jury's decision to convict under counts one and three and to acquit under count two of the indictment charging criminal diversion of prescription medications in the second degree (PL § 178.20) is not easily explained, the verdict in no way contravened this court's instructions, and no claim has been made that the verdict was defective, improper or repugnant.