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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 19-2635

STOP ILLINOIS HEALTH CARE FRAUD, LLC,

Plaintiff-Appellant,

v.

ASIF SAYEED, et al.,

Defendants-Appellees.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 1:12-cv-9306 — Sharon Johnson Coleman, Judge.

____________________

ARGUED APRIL 8, 2020 — DECIDED APRIL 29, 2020

____________________

Before RIPPLE, BRENNAN, and SCUDDER, Circuit Judges.

SCUDDER, Circuit Judge. Stop Illinois Health Care Fraud, 

LLC brought a qui tam lawsuit against Management Principles, Inc. and some of its associates as well as the Healthcare 

Consortium of Illinois, alleging that they had an illegal referral practice that violated the Anti-Kickback Statute and, by extension, the federal and state False Claims Acts. The MPI defendants proceeded to a bench trial. At the close of the plaintiff’s case, the district court entered judgment for the 

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defendants, concluding that there was no evidence that MPI 

paid any renumeration with the intent to induce referrals. 

Stop Illinois Health Care Fraud appeals that judgment. 

The trial evidence plainly showed that MPI made monthly 

payments to HCI in return for access to the non-profit’s client 

records and then used that information to solicit clients. The 

defendants contend that the arrangement constitutes a kickback offered in exchange for a referral, and that the district 

court came to the contrary conclusion because it employed 

too narrow an understanding of a referral. Review of the district court’s reasoning leaves us concerned that the court did 

not account for the evidence regarding MPI’s solicitation of 

HCI clients, and we are unable to confirm that the court employed the proper definition of a proscribed referral. We 

therefore reverse and remand for further proceedings. 

I

A

The Healthcare Consortium of Illinois, or HCI, was an organization that contracted with the Illinois Department of Aging to coordinate services for low-income seniors in an effort 

to keep them at home and out of nursing homes. HCI sometimes referred clients who needed in-home healthcare services to Vital Home & Healthcare, Inc. and Physician Care 

Services, S.C., two companies housed under the same umbrella entity, Management Principles, Inc. Also known by its 

acronym, MPI is owned and managed by Asif Sayeed. Stop 

Illinois Health Care Fraud, LLC—an entity whose name 

leaves few doubts about its mission—sued MPI, its two home 

healthcare companies, Sayeed, and HCI, alleging that they orchestrated an illegal patient referral scheme. 

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No. 19-2635 3

The plaintiff brought its claims under the federal False 

Claims Act and its Illinois analogue. In recognition of the limited resources available for the government to police violations on its own, both statutes allow enforcement to be outsourced to private parties, known as relators, who sue alleged 

wrongdoers on the government’s behalf in exchange for a cut 

of the recovery. See 31 U.S.C. § 3730(b)(1), (d); 740 ILCS 

175/4(b)(1), (d). We call this a qui tam action, which comes 

from an abbreviation of a Latin phrase meaning “who [qui] 

sues in this matter for the king as well as [tam] for himself.” 

See U.S. ex rel. Bogina v. Medline Indus., Inc., 809 F.3d 365, 368 

(7th Cir. 2016). Stop Illinois Health Care Fraud sued in this 

matter for the United States and the State of Illinois. Though 

both governments had the ability to intervene and take the 

matter over for themselves, they declined to do so.

The operative complaint alleged that MPI and HCI had a 

contract and that MPI paid HCI gift cards in substantial 

amounts in return for the ability to access the detailed information that HCI employees gathered about clients during inhome assessments. Using that information, MPI called Medicare-eligible seniors and offered them the services of its two 

home healthcare companies. MPI’s payments to HCI, the 

complaint alleged, ran afoul of the Anti-Kickback Statute, 42 

U.S.C. § 1320a-7b(b)(2), which makes it illegal to pay someone 

to induce them to refer a patient for services that will be paid 

for by a federal healthcare program. The plaintiff sued under

the federal and state False Claims Acts, which prohibit claims 

for payment on services resulting from violations of the AntiKickback Statute.

HCI settled the claims against it, but Sayeed and his companies proceeded to a bench trial. Ella Grays, who used to be 

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a supervisor at HCI, testified about her former employer’s 

usual referral practices. She explained that the organization 

dispatched caseworkers to seniors’ homes to assess whether 

they could safely remain living on their own and, if so, 

whether they needed additional services like meal deliveries 

or aides to assist with daily living. When a client needed inhome healthcare, the HCI caseworker would make a referral 

from a prepared list of providers. To ensure a fair distribution, 

HCI caseworkers rotated the referrals by methodically going 

down the list. MPI’s companies received referrals in this manner, and Grays did not believe that any of the referrals were 

given in exchange for something of value. 

The parties expended little trial time on the topic of gift 

cards. Grays testified she did not know of caseworkers ever 

receiving gift cards from anyone at MPI. The plaintiff presented the video testimony of Alice Piwowarski, a former MPI 

employee who said that she gave HCI caseworkers Dunkin’ 

Donuts gift cards on special occasions like birthdays and 

charged them to her expense account. Sayeed confirmed that 

his employee handed out the small gift cards—in $5 or $10 

amounts—as friendly birthday gifts but denied that the purpose was to receive referrals. 

Most of the trial testimony focused instead on a 2010 Management Services Agreement under which MPI paid HCI 

$5,000 a month. What HCI was paying MPI to do was the 

topic of much discussion, since the contract itself was vague. 

HCI’s only stated obligations were to “assist MPI in the management of the case management Program and appoint personnel as Associate Managers.” For their part, HCI’s associate 

managers had to “[d]evote sufficient time for the performance 

of all assigned duties” and “[p]rovide periodic written reports 

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of activities.” The plaintiff’s theory, as laid out in its opening 

statement, was that the ambiguous Management Services 

Agreement was a sham contract meant to disguise a kickback 

offered for patient referrals.

Sayeed testified that the idea for the agreement came 

about because HCI was in need of financial help and MPI was 

looking to become an Accountable Care Organization, which 

required enrolling 5,000 Medicare recipients as patients. Believing that MPI could not acquire that many patients on its 

own, Sayeed thought the company could rely on HCI records 

to find them—a process he referred to as “data mining.”

Sayeed explained that the executed agreement fulfilled this 

purpose by requiring HCI to do two things—give MPI access 

to the comprehensive forms that caseworkers filled out when 

they assessed clients and teach MPI about how it coordinated 

care. He also said that HCI’s attorney not only had contributed to drafting the agreement but also approved of it. 

MPI’s acquiring access to HCI’s caseworker paperwork 

was important because those documents included information about the clients’ medical diagnoses, healthcare 

needs, and living situations. Sayeed clarified that before the 

Management Services Agreement took effect, MPI had access 

only to the assessment forms of clients who HCI had referred 

to its providers, but the agreement opened the door to those 

of all HCI’s patients. 

The trial testimony also shed light on how MPI acquired 

access and what its employees then did with the information 

gleaned from HCI’s files. Sayeed testified that MPI employees 

would go to HCI’s office and copy the information from caseworkers’ forms to an intake tracking log and a client referral 

log. He explained that the data was helpful because MPI 

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could extract patterns from it to forecast future events, allowing for earlier intervention that was cheaper and more efficient. The purpose of collecting HCI clients’ information, he 

said, was not to solicit them for home health services but rather to help HCI and to mine data.

But Sayeed’s testimony showed that his companies did 

use the information obtained from HCI’s files to solicit and 

acquire new patients. MPI would call individuals from the 

logs and, if the person did not have a doctor and was unable 

to travel to one, it would send a doctor from MPI’s sister company Physicians Care Services to the client’s house. Something similar occurred for seniors in need of in-home nursing. 

MPI used the HCI data to forecast when a client would need 

help and then call the person’s doctor. If the doctor prescribed 

home assistance, MPI would send a nurse to evaluate the patient. 

Rosetta Cutright Woods, a former MPI employee whose 

job it had been to go to HCI and retrieve their clients’ information from the forms, confirmed that the solicitation process 

worked just this way. She testified that, upon arriving at HCI, 

she would access the caseworkers’ files and then write down 

the clients’ diagnoses and contact information. After returning to MPI, she would speak with the doctor who ran Physicians Care Services, and the doctor would review the list of 

HCI clients and instruct Woods who to call. Woods would 

then make the calls and asked the prospective clients if they 

needed additional medical assistance. If the person responded in the affirmative, Woods recorded the information 

and later relayed it to Physicians Care Services. 

According to Sayeed, the Management Services Agreement also required HCI to teach MPI about the care 

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coordination work that it did, and HCI provided an employee 

who was available to MPI for questions. But Sayeed could not 

name the HCI liaison, and he admitted to never having seen 

a written report of the person’s activities as was contemplated 

by the agreement. Ella Grays—the former HCI supervisor—

testified that she could not think of a time any HCI employee 

ever did work for MPI under the agreement. 

Indeed, Grays offered a different understanding of the 

Management Services Agreement. She testified that its purpose was for MPI to collect and analyze HCI’s data in an effort 

to help HCI better understand their clients’ needs and in doing so facilitate the organization’s grant-writing process. She 

recalled that as part of the agreement, MPI would call HCI’s 

clients to see if they needed additional services and, if so, they 

would make a referral that had to be approved by HCI’s director. 

The agreement remained in effect for 18 months, and 

MPI’s payments to HCI totaled $90,000. Sayeed testified that 

MPI then ceased the payments, but HCI nevertheless continued to give the company access to its clients’ information, 

which he attributed to the mutually beneficial nature of the 

arrangement. 

Finally, John Mininno, the head of Stop Illinois Health 

Care Fraud, offered testimony about his company’s relator 

practices and how the defendants and their practices came to 

his attention. But, unsurprisingly given his role in the litigation, Mininno had little firsthand information to offer on the 

topic of the Management Services Agreement’s purpose and 

operation. 

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B

After the plaintiff’s case concluded, the defendants moved 

for a directed verdict. They argued that the plaintiff had 

shown no impropriety in the HCI referrals as needed to meet 

its prima facie burden, both failing to substantiate the complaint’s allegations about using gift cards as bribes and presenting no evidence that the parties intended the Management Services Agreement to enable and facilitate referrals 

from HCI to MPI and its sister companies. The district court 

held oral argument on the motion, where the plaintiff put 

forth a different view of the evidence. Pointing to Woods’s 

testimony about collecting client information from HCI’s files 

and then using it to place solicitation calls, the plaintiff explained that the defendants used the agreement “to get referrals for essentially any patients that they wanted by having 

HCI open their files and allowing them, rather than getting a 

referral from an HCI case manager directly, to call those individuals up.” 

The following day the district court issued a brief written 

order finding that the plaintiff had fallen short of its burden. 

Because the trial had been before a judge and not a jury, the 

court construed the defendants’ motion for a directed verdict 

as one for judgment on partial findings under Federal Rule of 

Civil Procedure 52(c). The court’s factual findings touched 

lightly on the topic of the Management Services Agreement, 

noting that it provided for MPI to pay HCI $5,000 per month 

in exchange for “administrative advice and counsel”; that 

Sayeed discussed his “data mining” objectives with HCI’s 

lawyer, who gave his blessing; and that, even though John 

Mininno testified that the payments under the agreement constituted a kickback, he had not specifically explained why. 

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The district court’s legal conclusions were succinct. While 

acknowledging the undisputed evidence that an MPI employee gave low-value gift cards to a few HCI caseworkers 

and that the Management Services Agreement existed, the 

court found no evidence that either was intended to induce 

patient referrals. The evidence, the court continued, compelled the contrary conclusion. Sayeed testified that the payments his company made under the agreement were unaccompanied by any expectation of referrals, HCI’s lawyer had 

signed off on the contract, and other witnesses denied 

knowledge that the defendants had given anything of value 

in return for referrals. On that basis, the district court granted 

the defendants’ motion and entered judgment in their favor 

on all counts. The plaintiff now appeals.

II

Rule 52(c) provides for judgment based on partial findings, the bench trial equivalent of its more well-known cousin, 

a motion for judgment as a matter of law (or a directed verdict) under Rule 50(a). Both rules allow the trial court to resolve an issue after a party has been fully heard but before the 

trial has concluded. See FED. R. CIV. P. 50(a), 52(c). But Rule 

50(a) applies to jury trials, and Rule 52(c) applies to bench trials. The other crucial difference between the two is that a district court resolving a Rule 50(a) motion must consider the evidence in the light most favorable to the non-moving party to 

avoid usurping the jury’s role as factfinder, but there is no 

such concern in a bench trial, so under Rule 52(c) the court can 

weigh evidence, determine witness credibility, and make factual findings on the way to its legal conclusions. See Wilborn 

v. Ealey, 881 F.3d 998, 1008 (7th Cir. 2018). The court’s findings 

of fact and conclusions of law must comply with Rule 52(a)’s 

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requirement that the court “find the facts specially and state 

its conclusions of law separately.” See FED. R. CIV. P. 52(c). 

Recognizing that the district court is in the better position 

to determine facts, we defer to its factual findings unless there 

is a clear error. See Fillmore v. Page, 358 F.3d 496, 503 (7th Cir. 

2004). But the court’s legal conclusions are not entitled to that 

deference and we review them de novo. See id.; 9A C. WRIGHT 

& A. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2573.1 (3d 

ed.) (explaining that a Rule 52(c) judgment “is reversible only 

if the appellate court finds it to be clearly erroneous, even 

though the underlying conclusions of law are reviewed de 

novo”).

A

The plaintiff’s claims arose under the False Claims Act, but 

they hinged on whether the defendants violated the AntiKickback Statute. See 42 U.S.C. § 1320a-7b(g) (“[A] claim that 

includes items or services resulting from a violation of [the 

Anti-Kickback Statute] constitutes a false or fraudulent claim 

for purposes of [the False Claims Act].”); see also New York v. 

Amgen Inc., 652 F.3d 103, 113 (1st Cir. 2011) (concluding the 

same is true of the Illinois False Claims Act). Section 1320a7b(b)(2)(A) of the Anti-Kickback Statute makes it unlawful 

(indeed a felony) to knowingly and willfully offer or pay a 

renumeration to someone in order to induce that person to 

“refer” an individual for a service for which payment may be 

made under a federal healthcare program. 

The district court broadly concluded that the plaintiff offered “no evidence” that the gift cards or Management Services Agreement were intended to induce referrals. That is 

certainly true as to the gift cards. The agreement, however, 

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No. 19-2635 11

presents a more difficult issue. No doubt nothing linked the 

monthly payments to HCI caseworkers telling their clients 

that they should use MPI’s services. But the plaintiff put forward another, less direct theory—that MPI’s payments under 

the agreement were intended to secure access to the client information in the HCI files that it then used to place solicitation 

calls. The question is whether this arrangement could constitute a prohibited referral under the Anti-Kickback Statute. 

We expounded on what it means to “refer” a patient in 

United States v. Patel, 778 F.3d 607 (7th Cir. 2015). Dr. Kamal 

Patel prescribed home healthcare for some of his patients, and 

he was convicted of violating the Anti-Kickback Statute for 

accepting undisclosed payments from Grand Home Health 

Care. See id. at 609, 611. The evidence showed that Dr. Patel 

did not expressly direct his patients to Grand but instead allowed them to choose from among a stack of brochures for an 

assortment of home healthcare options. See id. at 610–11. To 

receive Medicare reimbursement for a patient who had selected Grand, the provider had to submit certification and 

recertification forms signed by a doctor to demonstrate that 

home care was medically necessary. See id. at 610. The government presented evidence that Grand and Dr. Patel had 

monthly meetings at which he signed certification forms and 

accepted cash payments. See id. at 611.

On appeal Dr. Patel argued that since his patients selected 

Grand on their own initiative, he could not be said to have 

referred them at all, let alone in exchange for payment. He 

urged us to construe Congress’s use of “refer” in the AntiKickback Statute in a limited way—as meaning “to personally 

recommend to a patient that he seek care from a particular 

entity.” Id. at 612. 

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We rejected that narrow definition of a referral in favor of 

a “more expansive” one that includes “a doctor’s authorization to receive medical care.” Id. at 613. Under that definition, 

Dr. Patel had referred patients to the healthcare provider that 

paid him, Grand Home Health Care, because he signed the 

mandatory certification forms necessary for the patients to receive Medicare-reimbursed home care. See id. at 614. The central characteristic of the referral, we explained, was that the 

doctor “facilitate[d] or authorize[d]” the patient’s choice of 

provider. Id. A doctor stands between the patient and his chosen provider because his approval is necessary to obtain the 

services, and “[e]xercising this gatekeeping role is one way 

that doctors refer their patients to a specific provider.” Id. In 

so concluding, we observed that our holding was consistent 

with Congress’s broad objectives in the Anti-Kickback Statute 

of preventing Medicare and Medicaid fraud and protecting 

patient choice. See id. at 615.

Patel’s holding that a physician “refers” patients to a home 

healthcare provider when he approves them for services does 

not directly control this case, which concerns not a gatekeeping doctor but an organization (here, HCI) with no certification authority. The applicable lesson is instead that the definition of a referral under the Anti-Kickback Statute is broad, 

encapsulating both direct and indirect means of connecting a 

patient with a provider. It goes beyond explicit recommendations to include more subtle arrangements. And the inquiry is 

a practical one that focuses on substance, not form. 

B

The district court was required to employ this inclusive 

understanding of a referral when evaluating whether the 

plaintiff had proven an illegal kickback scheme. The breadth 

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No. 19-2635 13

of the definition was particularly vital to the plaintiff’s theory 

that MPI’s payments to HCI under the Management Services 

Agreement constituted kickbacks intended to obtain referrals 

in the form of receiving access to the HCI files that the defendants then exploited to solicit clients. A factfinder applying an 

erroneously narrow understanding of a referral might find 

those facts, devoid of an explicit direction of a patient to a provider, to fall outside its scope. But application of the proper 

standard—the more inclusive, practical approach illustrated 

in Patel—presents a much closer question. 

We cannot tell with any certainty which route the district 

court took. The opinion contains no express articulation of 

what constitutes a referral for the purposes of the Anti-Kickback Statute. And the fact that some material evidence makes 

no appearance in the factual findings causes us to question 

whether the court applied the broader definition intended by 

Congress and underscored in our prior opinion in Patel. We 

have observed before that although “the district court cannot 

be expected to explain the significance of every bit of evidence 

in the record,” the failure to address material and potentially 

dispositive evidence “violates the command of Rule 52(a) to 

‘find the facts specially’ and precludes effective appellate review.” Mozee v. Jeffboat, Inc., 746 F.2d 365, 370 (7th Cir. 1984); 

see also Schneiderman v. United States, 320 U.S. 118, 129–30 

(1943) (“The pertinent findings of fact on these points . . . are

but the most general conclusions of ultimate fact. It is impossible to tell from them upon what underlying facts the court 

relied, and whether proper statutory standards were observed.”).

The district court’s opinion contains no mention of the evidence showing that MPI used its access to HCI’s files to solicit 

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and obtain patients, though the testimony on that point was 

considerable and unambiguous. Rosetta Cutright Woods explained with specificity how she was employed by MPI to go 

to HCI, copy down the medical and contact information from

client files, and then contact those people to see if they needed 

medical care. If someone said they did, then Woods relayed 

the information to Physicians Care Services. Sayeed confirmed that his companies used the information in that manner. A practical analysis of this arrangement would allow, but 

perhaps not compel, a finding that it qualifies as a referral. 

Though no evidence suggested that HCI directed its clients to 

MPI or its home healthcare companies, one could conclude 

that the effect of the file access was the same. Instead of giving 

its clients MPI’s name, the reasoning would go, HCI simply 

gave MPI its clients’ names and the information needed to 

contact them. 

But it seems the district court rejected this file-access theory of referral. We come to that view from the court’s statement that the plaintiff presented “no evidence” that the Management Services Agreement was intended to induce referrals. The broad statement could mean one of two things with 

respect to the file access—either the court concluded that the 

so-called “data mining” did not constitute a referral under the 

Anti-Kickback Statute or that it was not the intent of the agreement. The court must have meant the former, because the 

plaintiff did present some evidence that the agreement was 

intended to give MPI access to HCI’s files so that it could place 

solicitation calls. For example, Sayeed testified that the agreement’s purpose was to mine data, and Woods’s testimony 

about her collection of HCI’s “data” and what she did with it 

(solicit clients) allowed a finding that MPI’s intent to mine

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No. 19-2635 15

data was synonymous with an intent to use the information 

to reach HCI’s clients. 

In the end, we are left with uncertainty. The district court 

did not acknowledge any of the evidence supporting the fileaccess theory of referral, and we cannot discern why it was 

rejected. The court may have applied the correct definition of 

“refer” but found that the proof fell short of it, or it may have 

instead committed a legal error by adopting an unduly narrow understanding of the term. In the absence of more explanation of the court’s reasoning, we are unable to tell. The 

proper course in these circumstances—where the district 

court “made the necessary ultimate finding” that the Management Services Agreement was not intended to induce referrals but “failed to make the subsidiary findings necessary for 

us to follow its chain of reasoning”—is to remand for additional proceedings. Mozee, 746 F.2d at 370. 

* * *

We VACATE the judgment and remand the case for further proceedings. We leave it to the district court to decide 

whether to reach new findings of fact and conclusions of law 

on the existing record or to reopen the record and receive additional evidence. 

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