Health Care & Reproductive Rights

SACRAMENTO – Attorney General Kamala D. Harris has signed a friend-of-the-court brief in the U.S. Court of Appeals for the Eleventh Circuit strongly defending the constitutionality of federal health care reform and urging the court to uphold the law.

“Not only is the minimum coverage provision necessary to carry out Congress’ goals of lowering the costs of medical care and expanding insurance coverage, it is a proper exercise of federal authority that does not alter the essential attributes of state sovereignty,” the amicus brief states. “The Affordable Care Act continues a longstanding and necessary partnership between the states and the federal government in the healthcare policy arena.”

In January, a federal judge in Florida ruled that the law’s minimum coverage requirement, which mandates that individuals maintain health insurance or pay a fine, is unconstitutional because it regulates “inactivity” – or the decision to forgo coverage.

Attorney General Harris, joined by nine other attorneys general, rejected that view in the amicus brief filed yesterday in the U.S. Court of Appeals for the Eleventh Circuit, which is based in Atlanta. They argued that the Constitution gives Congress broad powers to regulate interstate commerce – and that an individual’s decision to purchase health insurance has a significant impact on interstate commerce because it allows formation of risk pools, lowers healthcare costs nationally and reduces the cost of uncompensated care.

The failure of millions of Americans to purchase health insurance has a significant impact on the states. In 2009, more than 7.2 million Californians – nearly one in four people under the age of 65 – lacked insurance for all or part of the year. More than 5.5 million Californians who could not afford private health insurance are enrolled in government-sponsored health plans, which will cost the state a projected $42 billion in the next fiscal year. According to the amicus brief, $27.1 billion of those funds comes from the General Fund, which faces a $25 billion deficit.

The minimum coverage provision of the Affordable Care Act will reduce the need to shift the cost of uncompensated care of the uninsured – and will thus reduce the expenses now absorbed by the states and by individuals with health insurance.

Others joining California in this brief are Connecticut, Delaware, the District of Columbia, Hawaii, Iowa, Maryland, New York, Oregon and Vermont.

In January, the same group of attorneys general – except the District of Columbia – filed an amicus brief in the U.S. Court of Appeals for the Sixth Circuit arguing for the constitutionality of the Affordable Care Act: http://oag.ca.gov/news/press_release?id=2032&p=3.

In March, those attorneys general filed an amicus brief supporting the law’s constitutionality in the U.S. Court of Appeals for the Fourth Circuit: http://oag.ca.gov/news/press_release?id=2047&p=3.

SAN FRANCISCO – Attorney General Kamala D. Harris hosted a Smart on Crime Policy Summit today with a veteran, bi-partisan group of leaders from across the state. Ten work groups – focusing on topics ranging from policing to victims’ rights – prepared briefing papers for Attorney General Harris. The papers, dealing with critical issues facing California, were the focus of the summit at U.C. Hastings College of the Law.

The 10 groups drew insights from best practices of other attorneys general, law enforcement leaders, universities, foundations, think tanks and others at the forefront of research, ideas and innovation. More information about the work groups, and the briefing papers, can be found at: www.smartoncrimepolicy.org.

The honorary co-chairs are William Bratton, former Los Angeles Chief of Police; Warren Christopher, former U.S. Secretary of State; Dolores Huerta, co-founder of the United Farm Workers; State Sen. Mark Leno (D-San Francisco); Constance L. Rice, co-director of The Advancement Project; George Shultz, former U.S. Secretary of State; and Kathleen Sullivan, professor and former dean of Stanford Law School.

The following is a list of topic areas and chairs of the 10 work groups:

Civil Rights Enforcement
Bill Lann Lee, Shareholder, Lewis, Feinberg, Lee, Renaker & Jackson, P.C.

Education & Truancy
Carlos Garcia, Superintendent, San Francisco Unified School District
Laurene Powell, Co-founder & President of the Board, College Track

Environmental Enforcement
Rick Frank, Director, California Environmental Law & Policy Center, U.C. Davis School of Law
John Poyner, District Attorney, Colusa County

Organized Crime, Gangs and Gun Crime
Lee Baca, Sheriff, Los Angeles County
Charlie Beck, Chief of Police, Los Angeles Police Department
Rev. Jeff Carr, Chief of Staff, Mayor Antonio R. Villaraigosa, City of Los Angeles
Gilbert Otero, District Attorney, Imperial County
Mike Ramos, District Attorney, San Bernardino County
Jack Weiss, Managing Director & Head of Los Angeles Office, Kroll

Health
Paul Gallegos, District Attorney, Humboldt County
Jane Garcia, CEO, La Clincia de La Raza
Dr. Mitch Katz, Director, Los Angeles Public Health Department
Dr. Bob Ross, President & CEO, The California Endowment

Mortgage Fraud and Consumer Protection
Kelly Dermody, Partner, Lieff Cabraser Heimann & Bernstein
Dan Grunfeld, Co-Chair, Litigation Department, Kaye Scholer
Greg Totten, District Attorney, Ventura Country

Policing
Tony Batts, Chief of Police, Oakland Police Department
Ron Davis, Chief of Police, East Palo Alto Police Department
George Gascon, District Attorney, San Francisco
Bill Landsdowne, Chief of Police, San Diego Police Department

Reentry & Recidivism Reduction
Lee Baca, Sheriff, Los Angeles County
Bonnie Dumanis, District Attorney, San Diego County
Larry Morse, District Attorney, Merced County
Tim Silard, President, Rosenberg Foundation
Mimi Silbert, President & CEO, Delancey Street Foundation

Technology
Ed Berberian, District Attorney, Marin County
Jack Christin, Jr., Associate General Counsel, eBay/PayPal
David Drummond, Senior Vice President & Chief Legal Officer, Google
Fred Humphries, Managing Director, Microsoft
Bruce Ives, Vice President & Deputy General Counsel, Hewlett-Packard
Scott Forstall, Senior Vice President, iPhone Software, Apple
Mitchell Kapor, Founder, Lotus Development Corporation
Sheryl Sandberg, Chief Operating Officer, Facebook

Victims' Rights
Gary Lieberstein, District Attorney, Napa County
Nancy O’Malley, District Attorney, Alameda County
Esta Soler, Founder & President, Family Violence Prevention Fund

For additional information, please call the Attorney General’s press office at 510.622.4500.

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SACRAMENTO – California Attorney General Kamala D. Harris and 37 other attorneys general today announced a $68.5 million settlement with AstraZeneca Pharmaceuticals for unfair and deceptive practices in its marketing of the antipsychotic drug Seroquel.

Today’s settlement is the largest multi-state settlement with a pharmaceutical company in history. California will receive more than $5.2 million, the largest share among the states in the consumer protection settlement.

“The health and well-being of patients should drive drug prescriptions in California, not the profits of a pharmaceutical company,” said Attorney General Harris. “This settlement puts an end to unscrupulous marketing practices and protects consumers from misguided, and potentially dangerous, treatment with Seroquel for uses the FDA has not approved.”

The complaint, filed today with the proposed judgment, alleges that AstraZeneca promoted Seroquel for unapproved uses, failed to adequately disclose potential side effects to health care providers, and withheld scientific studies that called into question the drug’s safety and efficacy.

Seroquel is an antipsychotic medication used to treat schizophrenia and bipolar disorder. It was approved by the Food and Drug Administration (FDA) for treatment of these conditions in adults, but AstraZeneca promoted the drug for children and the elderly to treat a variety of medical conditions, including anxiety, depression, post traumatic stress disorder, Alzheimer’s disease and dementia.

Doctors may prescribe medications for unapproved or “off-label” uses, but drug makers are prohibited from promoting drugs for treatment of medical conditions not approved by the FDA.

A three-year investigation, led by the attorneys general of Florida and Illinois, revealed that AstraZeneca also failed to adequately disclose side effects associated with Seroquel, including weight gain, hyperglycemia, diabetes and cardiovascular complications.

As part of today’s settlement, AstraZeneca agreed to not promote Seroquel in a false, misleading or deceptive manner, including for “off-label” uses. AstraZeneca is required to provide accurate and scientifically balanced responses to requests about off-label usage. The drug maker is also required to enact policies to ensure financial incentives are not given to salespeople for off-label marketing and post payments made to physicians on a website.

States joining California and the District of Columbia in today’s settlement include Arizona, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia and Wisconsin.

Copies of the related documents are attached to the online version of this release at ag.ca.gov.

The following is a statement from eight attorneys general who joined together in signing an amicus brief filed in the United States Court of Appeals for the Sixth Circuit on January 21, 2011 regarding the constitutionality of the Affordable Care Act.

Feb. 4, 2011

The Affordable Care Act is making a difference in the lives of millions of people in our states and it is poised to help even more as it continues to be implemented. Under the federal health reform law, millions of Americans now have access to free preventive care. People with pre-existing medical conditions who have struggled to find health insurance coverage will have to struggle no more. Insurers are required to cover them. Parents are now able to keep their children on their health insurance plans up to the age of 26. Senior citizens are receiving help to buy the prescription drugs they need. Small businesses are eligible for health insurance tax credits so that they can provide insurance to their employees. The list goes on. Whether people agree about all aspects of health care reform, we should be able to agree that for a lot of people, life has gotten better since the law was enacted and millions more will continue to benefit from the Affordable Care Act as it is fully implemented.

Of course, comprehensive health care reform is complex and people are still debating its implications. The legal challenges to the requirement that Americans buy health insurance are still in their initial stages. Twelve federal judges have already dismissed challenges to the constitutionality of the Affordable Care Act and two federal judges have ruled that the law is fully constitutional. Although a judge in Florida recently ruled that one provision of the federal health care law is unconstitutional, we believe the judge's ruling is incorrect and we applaud the decision by the U.S. Department of Justice to appeal it. We are confident that the constitutionality of the entire law will be upheld on appeal and ultimately by the United States Supreme Court. In the meantime, the numerous health care reforms provided in the federal health reform law will continue to be implemented to the benefit of all Americans.

KAMALA D. HARRIS
California Attorney General

GEORGE C. JEPSEN
Connecticut Attorney General

TOM MILLER
Iowa Attorney General

DOUGLAS F. GANSLER
Maryland Attorney General

ERIC T. SCHNEIDERMAN
New York Attorney General

JOSEPH R. "BEAU" BIDEN, III
Delaware Attorney General

WILLIAM H. SORRELL
Vermont Attorney General

DAVID M. LOUIE
Hawaii Attorney General

SACRAMENTO – Attorney General Edmund G. Brown Jr. announced today that special agents with the state Department of Justice, working closely with the U.S. Attorney’s office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the state Board of Equalization, have charged 15 individuals with tobacco smuggling and tax evasion schemes that diverted some $34 million from state and county health care programs and the state’s general fund.

The three-year investigation has uncovered “rampant fraud” among tobacco distributors with estimated tax losses totaling more than $80 million, including today’s case. More than $20 million in tobacco, property and cash has been seized.

“This is rampant fraud where fake invoices are used to disguise contraband tobacco, and often get passed from distributor to wholesaler to the mom-and-pop store,” said Brown. “We’re following every phony paper trail to ensure that the state collects every penny it’s owed in tobacco product taxes.”

The 15 individuals were arrested last week and released on bonds ranging from $50,000 to $250,000. The charges, which include mail fraud, conspiracy to commit mail fraud and trafficking in contraband tobacco, were filed in Sacramento and Los Angeles U.S. District Courts. The defendants charged in Los Angeles have been arraigned there, and the Sacramento defendants will be arraigned later this month.

The taxes evaded in these cases were for “other tobacco products,” such as cigars, chewing tobacco and leaf tobacco.

Under California law, distributors of these “other tobacco products” are required to collect an excise tax of more than 45% from the wholesaler and submit monthly reports to the Board of Equalization. To evade these taxes, distributors set up their businesses in Nevada or Arizona and report that they are exporting the tobacco and thus owe no excise taxes. The products are then smuggled into California, where actual sales are concealed by the use of shell companies to receive the products, false documents that understate the amount of tobacco, and the use of untraceable cash sales to wholesalers.

“This investigation has exposed systematic and widespread tax evasion in the distribution of tobacco products in California,” said U.S. Attorney Benjamin B. Wagner. “Participants in that industry who might be tempted to short-change the State of California should take note of the indictments announced today, and should understand that our investigations are not over.”

In 2008, the task force issued a search warrant against Ideal Tobacco, a large Nevada distributor. Using information seized from Ideal Tobacco, agents tracked down Ideal’s largest customers who were buying tobacco from Ideal and selling it in California, but failing to pay state’s tobacco tax.

The individuals and charges include:

• Galiom Mansour, president and CEO, and Naeim Hanno, CFO, of South Bay Wholesale, Inc. in Carson, are charged with 39 counts of mail fraud. Estimated losses to the state are $519,000 in unpaid tobacco products tax.
• Adib Sirope and Rimoun Mansour, partners in Pay-Less Wholesale in North Hollywood, are charged with 39 counts of mail fraud. Estimated losses to the state are $2.5 million in unpaid tobacco products tax.
• Atif Henan, Atef Shehata, Samy Girgis and Soheir Girgis, partners in Classic Wholesale (and later House of Tobacco) in Los Angeles, are charged with 17 counts of mail fraud. Estimated losses to the state are $1.5 million in unpaid tobacco products tax.
• Jack Haroun, president and CEO of Wholesale Palace in Burbank, is charged with 37 counts of mail fraud. Estimated losses to the state are $554,000 in unpaid tobacco products tax.
• Mohammed Halaweh, using the names CTC Distribution and T&T Tobacco for unlicensed companies in Los Angeles, is charged with 13 counts of mail fraud and eight counts of trafficking in contraband tobacco. Estimated losses to the state are $5.3 million in unpaid tobacco products tax.
• Mehdi Mohammed Humkar, using the name M&D Tobacco for an unlicensed company in Los Angeles, is charged with 15 counts of mail fraud and seven counts of trafficking in contraband tobacco. Estimated losses to the state are $528,000 in unpaid tobacco products tax.
• Rajnish Makkad, Charanjit Singh, and Amrit Singh, principals in Arctic Inc., a Nevada corporation not licensed to distribute OTP, and IIG Inc. in Los Angeles, are charged with 19 counts of mail fraud and 16 counts of trafficking in contraband tobacco. Estimated losses to the state are $13.8 million in unpaid tobacco products tax.
• Abdurrahman Yousuf, owner and operator of A to Z Cash and Carry in Los Angeles, is charged with 17 counts of mail fraud and 13 counts of trafficking in contraband tobacco. Estimated losses to the state are $2.3 million in unpaid tobacco products tax.

While sentencing varies, the maximum penalty for each count of mail fraud is 20 years in prison, a $250,000 fine, and a three-year term of supervised release. The maximum penalty for each count of trafficking in contraband tobacco and each count of conspiracy is five years in prison, a $250,000 fine, and a three-year term of supervised release.

LOS ANGELES -- Attorney General Edmund G. Brown Jr. today announced a settlement with Washington state-based Rena Ware International, Inc., which “made fraudulent and unethical claims” that its high-priced cookware could cure diseases such as diabetes and heart disease. The company agreed to pay more than $600,000 in refunds and other fees.

“This company made fraudulent and unethical claims that its products cured serious diseases,” Brown said. “Their illegal, high-pressure sales tactics preyed on the fears of vulnerable Californians.”

Rena Ware targeted Spanish-speaking immigrants in the Los Angeles-area to sell its high-priced cookware. Sales representatives employed deception to enter people’s homes -- claiming to offer health and nutrition information, to be taking an opinion poll, or to be willing to service the consumer’s current cookware.

Once inside the home, the representatives claimed the consumer’s cookware caused a variety of diseases such as cancer and Alzheimer’s, diabetes and heart problems. The representatives claimed Rena Ware’s products were not only safe to use but could actually cure some of these diseases.

Consumers who were persuaded to buy the products were often enticed into financing plans with a rate of more than 21% a year. Sales representatives often did not tell consumers they had a three day cooling-off-period to change their minds and cancel the order, a right California law guarantees all consumers who buy products from door-to-door salespeople.

Rena Ware sent consumers harassing debt collection notices purportedly signed by an attorney, but no attorney had signed the notices or seen customers’ files to verify whether the debts were actually owed. The purpose of the notices was sheer intimidation.

In late 2008, a Rena Ware International sales representative went to the home of Mercedes Ballestero in Los Angeles. The representative requested an in-home demonstration to show off Rena Ware’s products and put to shame Ms. Ballestero’s current cookware. The representative claimed Rena Ware’s products could reduce high blood pressure by removing hormones from meat as it cooked. Ms. Ballestero bought a set of Rena Ware cookware for more than $1,500 with a hidden interest rate of 21.5 percent. After discovering the high interest rate, Ms. Ballestero canceled her contract, but the company refused to return her deposit.

Today’s agreement requires Rena Ware to pay $135,400 in penalties, $250,000 in refunds to consumers, and $239,600 in other costs.

Rena Ware must also obtain an independent monitor to ensure the company refrains from using false information or high-pressure sales tactics to lure customers.

Brown’s office was joined in today’s agreement by the Los Angeles County District Attorney. The Los Angeles County Department of Consumer Affairs assisted in the investigation.

In 2008, Brown obtained a judgment against Hy Cite Corporation for similar misrepresentations in the sale of its “Royal Prestige” line of cookware. Hy Cite was required to pay more than $1.3 million in penalties, restitution and costs, agreed to three years of independent monitoring, and forced to change its business practices.

Rena Ware customers who are eligible for a refund will be contacted by mail, and any consumers who feel they have been victimized by Rena Ware International, Inc. or other houseware companies may file a complaint with the Attorney General’s Public Inquiry Unit at www.ag.ca.gov/consumers/general.php, or by calling (800) 952-5225.

Copies of the complaint and settlement, filed in Los Angeles County Superior Court, are attached.

MONTEREY – Attorney General Edmund G. Brown Jr. has filed a lawsuit to shut down the Monterey County AIDS Project and recover more than $2.8 million intended for the benefit of people affected by HIV/AIDS that was illegally diverted to other uses.

Brown said that former officers and directors of the Seaside charity, called MCAP, took some of the money for personal use and for-profit ventures, in violation of state law and a May 2000 court order specifying that at least $1.8 million be used “solely for the purpose of providing housing for people with the HIV disease.” The complaint alleges that another $1 million in other grants and donations was misspent as well.

“The duty of these officers and directors was to protect the charity’s assets so the funds could be used for the support of very sick people,” Brown said. “Instead, they violated their trust and spent the money any way they wanted.”

The Attorney General’s lawsuit, filed Friday in Monterey County Superior Court, seeks to dissolve MCAP, obtain a complete accounting of its finances, and recover any remaining assets dissipated through “the mismanagement and neglect of former officers and members of its board of directors.” Brown also seeks return of assets that were illegally diverted. Sixteen former officers and directors are named.

The complaint describes a scheme in which the MCAP officials, over nearly a decade, drained the organization’s coffers of money earmarked for HIV/AIDS patients.

The organization’s record-keeping was so sloppy and incomplete that it’s hard to determine exactly where all the money went. MCAP continued to provide housing and services for AIDS patients, but at a lesser level than its overall expenditures would suggest.

Some of the charity’s money was spent on unauthorized expenditures, such as meals at expensive restaurants, personal expenses on credit cards, purchasing items for personal use at auctions, personal moving and storage expenses, a personal mortgage payment, and steam-cleaning a carpet in a private residence.

MCAP was created in 1985 to provide support, resources and services, including housing assistance and hospice care, for HIV/AIDS patients in Seaside, north of Monterey.

Eleven years ago, MCAP received $1.8 million in cash and property from the estate of Douglas E. Madsen, a Monterey County resident, with the restriction that the bequest be used for the sole purpose of housing active AIDS patients.

But, according to Brown’s complaint, more than $2.8 million of charitable assets, including the Madsen money, was “misappropriated, misapplied or wasted.” In 1999, MCAP listed assets of $2.1 million. By 2004, that had dwindled to $1.4 million, and by 2007, only $205,000 was left.

As Attorney General, Brown is the official charged with ensuring that charitable organizations in California spend their money for the purposes specified by their founding documents, internal policies and state law.

MCAP’s filings with the Attorney General’s Registry of Charitable Trusts can be found at http://ag.ca.gov/charities/index.php

The complaint is attached.

OAKLAND – Attorney General Edmund G. Brown Jr. today announced that California, along with other jurisdictions, has reached a $520 million settlement with AstraZeneca Pharmaceuticals LP, to settle allegations it engaged in the “dangerous practice” of promoting drugs for unapproved uses in marketing Seroquel, its blockbuster antipsychotic drug.

London-based AstraZeneca will pay states and the federal government a total of $520 million in damages and penalties. California’s share is $31 million for Medi-Cal, which provides health care to the state’s poor, and other state programs.

“This company engaged in an illegal, off-label marketing campaign to boost sales of Seroquel, a powerful antipsychotic drug that should be prescribed with great caution,” said Brown. “This practice of promoting drugs for unapproved uses is dangerous and can have serious and unforeseen consequences.”

Seroquel is an antipsychotic medication used to treat psychological disorders. From 2001 through 2006, AstraZeneca was found to have promoted the drug not only to psychiatrists, but also to primary care physicians and other healthcare professionals for unapproved uses in the treatment of medical conditions such as aggression, Alzheimer’s disorder, anger management, anxiety, attention deficit hyperactivity disorder, dementia and sleeplessness.

Doctors may prescribe medications for off-label uses, but drug makers are prohibited from promoting drugs for treatment of medical conditions not approved by the Food and Drug Administration (FDA.)

In its marketing campaign, AstraZeneca was also alleged to have made illegal payments to physicians, paying their way to travel to resort locations to “advise” AstraZeneca about marketing messages for unapproved uses, to serve as authors of articles written by AstraZeneca and its agents, and to conduct studies for unapproved uses of Seroquel.

The settlement resolves claims that, as a result of these promotional activities, AstraZeneca encouraged physicians to prescribe Seroquel for children, adolescents and dementia patients in long-term care facilities for uses not medically accepted or FDA-approved. Among other side effects, the drugs have been shown to cause significant weight gain in children. The company also failed to adequately disclose studies that show Seroquel increases the risk of diabetes.

As part of the settlement, AstraZeneca will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company’s marketing and sales practices.

This settlement is based on qui tam cases, or whistle-blower lawsuits, that were filed in the United States District Court for the Eastern District of Pennsylvania.

“DHCS works closely with the California Department of Justice and federal authorities to identify and recover improper payments caused by these unlawful practices. The funds recovered in this action will be put back into the Medi-Cal program to serve the medically needy citizens of this state,” said DHCS Director David Maxwell-Jolly.

A National Association of Medicaid Fraud Control Units team, including members from California and other states, participated in the investigation and entered into the settlement negotiations with AstraZeneca on behalf of the states.

SAN DIEGO—Attorney General Edmund G. Brown Jr. today announced the arrests of a doctor and two employees operating a “complex, multi-level scheme” that bilked more than $200,000 from low-income patients and government agencies by overcharging and prescribed pain medication to individuals who had no medical need for it.

Beginning in 2007, the three individuals arrested Wednesday perpetrated their scheme to defraud state and federal health insurance programs and patients in the San Diego area.

“These individuals operated a complex, multi-level fraud scheme,” Brown said. “Today’s arrests are a result of the cooperative efforts of state and federal law enforcement to take this dirty doctor off the streets.”

The individuals arrested today include Dr. Mohammed Tarek Kady, 55, Mario Ramirez Zarco, 31, and Ana Audelo, 23, all three from Chula Vista.

All three individuals were charged with violating California Penal Code sections 182(a)(1), 182(a)(4), 487(a), and 550(b)(3) for conspiring to cheat and defraud, to commit grand theft, and commit insurance fraud.

In addition, Kady was also charged with:
• One count of violating California Welfare and Institutions Code section 14107(b)(4)(A) for Medi-Cal fraud
• Five counts of violating California Penal Code section 487(a) for grand theft
• Three counts of violating California Penal Code section 550(a)(6) for insurance fraud
• Seven counts of violating California Health and Safety Code section 11153(a) for illegal prescribing
• One count of violating California Labor Code 3700.5(a) for failing to obtain worker’s compensation for employees
• Special Allegations of theft, including theft in excess of $100,000.

The arrests are the result of a cooperative effort between Brown’s office, the San Diego District Attorney’s Insurance Fraud Task Force, the Federal Bureau of Investigation (FBI), San Diego Health Care Fraud Squad and San Diego Organized Crime Squad, the California Department of Industrial Relations, and the federal Drug Enforcement Administration (DEA), Tactical Diversion Squad.

In February 2009, an Anthem Blue Cross investigator reported Kady’s pediatric office in Chula Vista was unlawfully charging fees to patients enrolled in state and federal health insurance plans.

Two of Kady’s employees, Mario Zarco and Ana Audelo, unlawfully charged patients $50 to $500 for assistance in enrollment in state and federal health insurance coverage. Kady himself unlawfully charged patients an additional $200 to $300 fee to examine their newborn children in the hospital.

Investigators estimate that Kady unlawfully charged more than $60,000 for services to individuals and families enrolled in state and federal health insurance coverage.

Brown’s investigation also showed Kady frequently traveled out of the country for several weeks at a time but continued to charge for his services at his Chula Vista office. Reimbursement claims indicate Kady charged more than $160,000 for services when, in reality, he was out of the country.

In addition to overcharging for services and charging for services never performed, Kady prescribed pain medication to individuals without any justifiable medical purpose, enabling patients apparently “doctor shopping” for drugs. Kady wrote prescriptions for opiates, including the narcotic, Vicodin, and codeine cough syrups to drug addicts abusing the drugs and illegally selling them. On seven DEA sting operations, most recently last month, Kady prescribed narcotics without medical justification.

Kady’s patients were instructed to fill their pain medication prescription at one San Diego pharmacy. An employee at the pharmacy became suspicious after dozens of individuals attempted to fill prescriptions, written by Kady, at the pharmacy each Friday. The investigation revealed Kady and the pharmacy owner had a quid pro quo arrangement in which the pharmacy would kick back some $3 per prescription.

According to the Medical Board of California, Mohammed Tarek Kady was licensed as a physician in December 1997. He is a family practitioner with board certification in Pediatrics, and maintained two clinics, one in Chula Vista and one in San Diego.

If convicted of all charges, Kady faces as much as 20 years in prison. Zarco and Audelo face up to 6 years in prison if convicted of all charges.

“The Drug Enforcement Administration is committed to keeping the San Diego community safe from doctors who enable the abuse of prescription drugs”, says Special Agent in Charge Ralph W. Partridge. “The suspension of Doctor Kady’s controlled substance privilege is an important step toward ensuring accountability of those who supply controlled substances illegally”.

A copy of the complaint filed in San Diego Superior Court is attached. Photos of the defendants are also attached.

LOS ANGELES – Attorney General Edmund G. Brown Jr. today announced a multi-state agreement with Valero Oil to stop young people from purchasing tobacco products at its convenience stores.

“For years gas station convenience stores have served as an illegal provider for underage smokers. Today, Valero has finally joined the growing list of companies that have made a commitment to prevent illegal access to tobacco,” Attorney General Brown said. “Smoking remains a serious public-health problem in our country, and we need to do everything possible to keep young people from picking up the habit.”

Every day, some 2,000 children begin smoking in this country. One-third of them will die of tobacco-related diseases. Nearly half of underage smokers said they bought their cigarettes at gas station convenience stores.

Attorneys General throughout the country reached this agreement after a nationwide investigation, led by Brown’s office, of tobacco selling practices at convenience stores owned by or affiliated with Valero.

The agreement includes the following provisions:

• Valero retail personnel will receive training about the health risks associated with childhood tobacco use.
• Valero will administer independent compliance checks to monitor sales practices at company-owned convenience stores, to ensure they are not selling tobacco to minors.
• Vending machines, free samples, and self-service displays of tobacco products will be prohibited at company-owned stores.
• In-store tobacco advertisements will be limited to reduce youth demand for tobacco products.
• Valero will require all of its convenience store operators to notify the company if tobacco products are sold to minors in violation of state law.
• The states will continue to impose sanctions against stores that sell tobacco to minors.

There are over 900 Valero stations in California. Although Valero does not directly own or operate the convenience stores at many of those stations, it has agreed to adopt procedures designed to reduce tobacco sales to minors at all of its outlets.

Nationwide, 47% of underage youths who reported buying cigarettes said they got them at gas station convenience stores. Studies have linked retail tobacco marketing with underage smoking. In addition, many convenience stores are located near schools and playgrounds. Studies show that most adult smokers began smoking before the age of 18.

Recently, other multi-state agreements have been inked to curb the sale of tobacco to minors at gas station convenience stores, including Conoco, Phillips 66, 76, Exxon, Mobil, BP, ARCO, Chevron, and Shell, as well as retail and pharmacy outlets operated by Kroger, 7-Eleven, Walgreens, Rite Aid, CVS, and Wal-Mart. Participating grocery stores include Ralphs, Safeway, and Vons.

A copy of the agreement is attached.