UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF MICHIGAN 

State Farm Mutual Automobile Insurance 

Company, 

)

)

 ) 

 Plaintiff, ) 

 ) 

 v. ) Case No. 

 ) 

Pointe Physical Therapy LLC, ) PLAINTIFF DEMANDS 

New Era Physical Therapy, P.C., 

New Era PT Services, Inc., 

)

)

TRIAL BY JURY 

Ram Gunabalan, M.D., 

Sherif El-Sayed, 

Amale Bazzi a/k/a Amanda Bazzi, 

)

)

)

Michigan Visiting Physicians, PC d/b/a Choice 

House Call, 

)

)

Mundy Pain Clinic P.C., ) 

Medical Evaluations P.C., ) 

Martin Quiroga, D.O, ) 

Andrew Ruden, M.D., ) 

James Beale Jr., M.D., 

Sean John Hoban, M.D., and 

Bio-Magnetic Resonance, Inc., 

)

)

)

)

 Defendants. ) 

 

COMPLAINT 

State Farm Mutual Automobile Insurance Company (“State Farm”) for its 

Complaint (“Complaint”), alleges as follows: 

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I. NATURE OF THE ACTION 

1. This action seeks to recover money fraudulently obtained by 

Defendants from State Farm through the submission of hundreds of bills and 

related documentation from: 

(a) physical and occupational therapy facilities Pointe Physical Therapy 

LLC (“Pointe”), New Era Physical Therapy, P.C (“New Era I”) and 

New Era PT Services, Inc. (“New Era II”) (collectively the 

“Treatment Facilities”), for treatment purportedly provided to 

individuals (“patients”) who were involved in motor vehicle accidents 

and eligible for Personal Injury Protection benefits (“No-Fault 

Benefits”) under State Farm insurance policies; 

 

(b) clinics Michigan Visiting Physicians, PC d/b/a Choice House Call 

(“Choice”), Mundy Pain Clinic P.C. (“Mundy”), and Medical 

Evaluations P.C. (“Medical Evaluations”) (collectively the 

“Prescribing Clinics”), at which physicians purported to evaluate 

patients and provide prescriptions for the medically unnecessary 

physical and occupational therapy provided by the Treatment 

Facilities; 

(c) physicians Ram Gunabalan, M.D. (“Gunabalan”), Martin Quiroga, 

D.O. (“Quiroga”), Andrew Ruden, M.D. (“Ruden”), James Beale Jr., 

M.D. (“Beale”), and Sean John Hoban, M.D. (“Hoban”) (collectively 

the “Prescribing Physicians”), who purported to evaluate patients and 

wrote prescriptions for the medically unnecessary therapy provided by 

the Treatment Facilities; 

(d) Gunabalan, Sherif El-Sayed (“El-Sayed”), and Amale Bazzi a/k/a 

Amanda Bazzi (“Bazzi”) (collectively the “Management Group”) 

who, at all times, secretly owned and/or controlled the Treatment 

Facilities and Prescribing Clinics, controlled the Prescribing 

Physicians, solicited and supplied patients to the Prescribing Clinics, 

Prescribing Physicians and Treatment Facilities, maintained referral 

relationships with patients’ personal injury attorneys, directed 

patients’ treatment, coordinated patients’ transportation to and from 

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the Treatment Facilities and Prescribing Clinics, and stood to profit 

from all aspects of the scheme; and 

(e) a magnetic resonance imaging testing facility, Bio-Magnetic 

Resonance, Inc. (“Bio-Magnetic” or the “MRI Facility”) that was 

owned and/or controlled by Gunabalan and to which patients of the 

Treatment Facilities were referred for unnecessary MRIs. 

2. Defendants’ scheme is centered upon the Treatment Facilities, which 

were owned and/or controlled by the Management Group and were formed and 

used by the Management Group to submit bills and other documentation to State 

Farm for physical and occupational therapy purportedly provided to patients who 

had been involved in automobile accidents. The Treatment Facilities’ bills and 

supporting documentation submitted to State Farm were fraudulent because, as 

described more fully below, the services either were not performed or were 

performed pursuant to a fraudulent predetermined treatment protocol 

(“Predetermined Protocol”), rather than to address the unique needs of the 

individual patients, and in violation of Michigan’s prohibition on physician selfreferrals. 

3. Specifically, pursuant to the Predetermined Protocol, the Treatment 

Facilities purported to provide the same physical therapy modalities — typically 

hot and/or cold packs, electrical stimulation, ultrasound, therapeutic exercise and 

manual therapy or massage — to virtually every patient on almost every visit for as 

long as possible, regardless of their unique conditions, needs, and progress, or lack 

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thereof. See Exs. 1 and 2. In addition, in early 2010, an occupational therapist was 

hired to work at Pointe and in approximately October or November 2010, that 

same occupational therapist began working at New Era. Once the occupational 

therapist was hired, the Treatment Facilities purported to incorporate occupational 

therapy into the Predetermined Protocol at the respective facilities. 

4. The occupational therapy modalities included modalities identical to 

the physical therapy modalities except that, while the occupational therapist 

purported to provide the modalities on the upper part of the body, the physical 

therapist purported to provide the same modalities on the lower part of the body. 

During the period when each Treatment Facility employed the occupational 

therapist, the incorporation of occupational therapy into the Predetermined 

Protocol resulted not only in the provision of medically unnecessary occupational 

therapy, but double billing because, for many patients, the Treatment Facilities 

billed two charges for the same modality – for example, one charge for hot packs 

applied by the occupational therapist to the patient’s upper body, and a second 

charge for hot packs applied by the physical therapist to the patient’s lower body. 

If the same hot packs had been applied to both the upper and lower body by either 

the physical therapist or occupational therapist, the Treatment Facilities would 

have been limited to one charge for all the hot packs. Moreover, the addition of an 

occupational therapist resulted in the Treatment Facilities purporting to provide 

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and bill for yet another service, self-care training, which had never been provided 

or purportedly needed before the occupational therapist arrived and was never 

provided or apparently needed after she stopped working at the Treatment 

Facilities. See Exs. 1 and 2. 

5. Under Michigan law, physical therapy cannot be performed without a 

prescription from a physician. Thus, the Management Group needed a ready 

supply of physicians willing to prescribe medically unnecessary therapy for the 

Treatment Facilities’ patients. The Management Group set up the Prescribing 

Clinics, hired physicians including the Prescribing Physicians to work for them, 

and directed the Prescribing Physicians and others working at the Prescribing 

Clinics to write prescriptions for medically unnecessary therapy that would be 

provided at the Treatment Facilities. Moreover, although a prescription is not 

required to perform occupational therapy under Michigan law, after occupational 

therapy was incorporated into the Predetermined Protocol, physicians who worked 

at the Prescribing Clinics, including the Prescribing Physicians, began to prescribe 

medically unnecessary occupational therapy as well. The occupational therapy 

prescriptions purportedly were issued to treat primarily cervical, or upper body, 

sprains and strains, and head trauma, headaches and closed head injuries. 

Remarkably, the number of patients diagnosed with headaches and closed head 

injuries significantly increased about the time Pointe hired an occupational 

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therapist in early 2010, and many of these patients were then prescribed 

occupational therapy. See Ex. 3, listing who were diagnosed with head injuries 

and received and/or were prescribed occupational therapy. Despite the fact that 

head injuries caused by an automobile accident often appear at or about the time of 

the accident, some patients were not diagnosed with headaches or closed head 

injuries until well after their accidents or after another examination in which there 

had been no indication of such an injury. Id. 

6. Two of the Prescribing Clinics, Choice and Mundy, were owned on 

paper by Gunabalan, and the third, Medical Evaluations, was owned on paper by 

Beale. In fact, however, all three Prescribing Clinics were owned and/or controlled 

by all three members of the Management Group. 

7. In addition, the Management Group directed the Prescribing Clinics 

and Prescribing Physicians to steer patients for medically unnecessary MRIs at the 

MRI Facility owned and/or controlled by Gunabalan which were then billed to and 

paid for by State Farm. 

8. The Management Group also directed the Prescribing Clinics and 

Prescribing Physicians to issue disability certificates which, among other things, 

enabled patients to receive transportation to and from the Treatment Facilities and 

Prescribing Clinics – primarily from two companies, Get Well Medical Transport 

Co. (“Get Well Transport”) and Transport Us, LLC (“Transport Us”), which were 

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owned by relatives of the Management Group – at no cost to the patients, but at a 

significant cost to State Farm. See Exs. 1 and 2. 

9. Pursuant to the Predetermined Protocol, the Prescribing Physicians 

continue to examine and prescribe physical and/or occupational therapy, and the 

Treatment Facilities continue to provide the same modalities on almost every visit 

for as long as possible to maximize: (a) the amounts that can be billed to State 

Farm; and (b) the value of the patients’ personal injury claims in order to curry 

favor with a small group of personal injury attorneys (“PI Attorneys”) with whom 

Defendants appear to have substantial quid pro quo cross-referral relationships. 

10. The Management Group also solicited and/or supplied patients to be: 

(a) evaluated and prescribed therapy by the Prescribing Physicians and at the 

Prescribing Clinics, and (b) ultimately treated at the Treatment Facilities. In 

particular, many patients were referred to the Treatment Facilities, Prescribing 

Clinics and/or Prescribing Physicians by attorneys, investigators and solicitation 

services. The Management Group had quid pro quo cross-referral relationships 

with PI Attorneys in which, among other things, PI Attorneys were motivated to 

send patients to facilities controlled by the Management Group because 

Defendants referred patients to them, and their facilities could be counted on to 

treat patients in a way that inflated the value of potential tort claims. The 

Management Group acted as a liaison with PI Attorneys, brought patients to their 

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clinics, exercised control and influence over those clinics, and then used that 

influence to ensure that patients were prescribed physical therapy and sent for that 

therapy to the Treatment Facilities. 

11. Defendants’ scheme began at least as early as December 2007, and 

has continued uninterrupted since that time. As a direct and proximate result of the 

scheme, State Farm has incurred actual damages of at least $775,000 in No-Fault 

Benefits paid to Defendants. 

12. This action seeks a declaratory judgment that State Farm is not liable 

for any pending bills or bills submitted during the pendency of this action by 

Defendants based upon the above-described conduct. This action also asserts 

common law claims for fraud and unjust enrichment, as well as statutory claims 

under 18 U.S.C. §§ 1962(c) and (d) (“RICO”), to recover actual damages of at 

least $775,000 in No-Fault Benefits paid to Defendants, plus treble damages and 

costs, including reasonable attorneys’ fees. State Farm has not been reimbursed by 

the Michigan Assigned Claims Facility, the Michigan Catastrophic Claims 

Association or any other source for any of the claims at issue in this case. 

II. ALLEGATIONS COMMON TO ALL COUNTS 

A. The Management Group Owned And/Or Controlled The 

Treatment Facilities And The Prescribing Clinics 

1. Treatment Facility Defendants 

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13. The Treatment Facilities – Pointe, New Era I and New Era II – 

purport to provide physical therapy and occupational therapy to patients and were 

secretly owned and/or controlled by the Management Group – Gunabalan, ElSayed and Bazzi. The Treatment Facilities consistently followed the 

Predetermined Protocol, employed the same individuals, and generated the same 

documentation to support their fraudulent claims. Patients were steered to the 

Treatment Facilities based on prescriptions from the Prescribing Physicians, 

Prescribing Clinics and other physicians, at the direction and orchestration of the 

Management Group. 

14. As set forth below, the Management Group owned and/or controlled 

the Treatment Facilities and knowingly coordinated and controlled this aspect of 

the scheme. 

a. Pointe Physical Therapy 

15. Gunabalan is identified as the organizer of Pointe on documents filed 

with the State of Michigan and has testified that he owns Pointe. 

16. Gunabalan is the registered agent of Eastpointe Associates LLC which 

owns 17200 East Ten Mile Road, Eastpointe, Michigan, the building in which both 

Pointe and Choice are located. 

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17. Dr. Joel Milliner – who worked for both Choice and Medical 

Evaluations – testified that he understood Pointe was owned by El-Sayed and a 

female partner who was “probably” named “Amanda.” 

18. El-Sayed’s role with respect to Pointe is reflected in his significant 

participation in directing patients to treatment at Pointe. Indeed, Milliner testified 

that El-Sayed owned and controlled Medical Evaluations to steer patients into 

receiving therapy at Pointe. Specifically, Milliner stated that El-Sayed owned 

Medical Evaluations and hired Milliner as an independent contractor to evaluate 

automobile accident patients. Milliner was not paid by Medical Evaluations and 

did not pay rent or any other amounts to Medical Evaluations, but used its facility, 

equipment and staff. In exchange, Milliner testified, “if they had a patient in an 

auto accident, they could refer for physical therapy.” According to Milliner, ElSayed told Milliner that if he referred patients for physical therapy, El-Sayed had a 

facility to use, and while Milliner did not testify to the name of the facility, patients 

were referred to the physical therapy facility in the same building as Choice, 

namely Pointe. Milliner further testified that patients would arrive at Medical 

Evaluations by the van-load, and he did not know where they came from. Milliner 

worked at Medical Evaluations for approximately one month, at which point “it 

stopped feeling right” because patients were brought to him and he did not know 

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where they came from, and some patients appeared to have been in minor 

accidents, such that he did not understand the need for continued therapy. 

19. Similarly, Syed Raoof, a doctor who examined and prescribed therapy 

for several patients who were treated at Pointe, described the roles of Bazzi and ElSayed in generating patients and prescriptions. Raoof, who billed for these 

examinations through Pinnacle Medical Services, P.C. (“Pinnacle”), testified that 

at Pinnacle: (a) all of his patients were auto accident patients, (b) patients were 

brought to him by Bazzi, who acted as a liaison between the attorneys and him, (c) 

all of his “patients [were] referred to physical therapy clinics that are owned by 

Amanda,” (d) attorneys “would give patients to Amanda and Amanda would 

distribute all the patients to her various, a dozen or more clinics,” (e) Amanda 

trained Raoof’s staff on how to refer patients for physical therapy, (f) Amanda 

provided Raoof with an office manager – El-Sayed – who paid all of Raoof’s 

medical assistants, as well as Pinnacle’s utilities and rent, and Raoof did not have 

to pay for anything, (g) Raoof contracted his billing to a company owned by 

Amanda, Quick Health Care Billing, Inc., and did not set his own prices, (h) Raoof 

only kept 40-45% of the collections, and (i) Raoof was pressured by Amanda and 

El-Sayed to continue prescribing physical therapy to “build the case up,” but was 

“uncomfortable” and thought the arrangement “morally [did not] sound right,” and 

thus, ultimately terminated his relationship with Amanda and closed Pinnacle. 

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b. New Era I And New Era II 

20. On paper, New Era I and New Era II appear to be distinct entities, 

with the former owned on paper by Vinod Joshi, a physical therapist, and the latter 

owned on paper by Gigi John, also a physical therapist. In fact, New Era I and 

New Era II are one and the same and both were at all times owned and/or 

controlled by the Management Group. 

21. New Era I and New Era II operated out of the same location in Flint, 

Michigan. 

22. New Era II purported to acquire and assume the operations of New 

Era I, but the transaction was nothing more than a sham. Joshi is identified as the 

incorporator, resident agent, president and vice president of New Era I in public 

filings with Michigan Department of Energy, Labor and Economic Growth 

(“DELEG”). On October 19, 2009, New Era I submitted its last bill to State Farm, 

and Joshi has testified that it stopped operating on November 2, 2009. Four days 

later, on November 6, 2009, New Era II was formed with Gigi John as the 

incorporator and resident agent. However, Joshi admitted that he did not sell his 

business or any of its assets, he did not get paid for any of the assets, he did not 

remove any equipment from the facility after the sale, and there were no 

transactions between him and the person who took over. Rather, El-Sayed – who 

Joshi claims was only the “office manager” of New Era I – facilitated the 

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transaction by “hir[ing] somebody named Gigi.” Notably, a motive for the 

“transfer” from New Era I to New Era II might be that only one month after the 

purported transaction, Allstate filed suit against Joshi, Bazzi, Beale, Medical 

Evaluations, and others, including Salma Sheikh and Global Medical Billing (both 

of whom provided billing services to New Era) in an action alleging fraud and 

conspiracy. The attorney who represented these individuals and entities in that 

lawsuit, Michael S. Cafferty, was the same attorney who submitted New Era II’s 

Articles of Incorporation. See Ex. 4. Even after the purported transaction, Joshi 

continued to file annual updates for New Era I with the DELEG, submitting the 

2010 and 2011 updates on February 22, 2011, and the 2012 update on February 14, 

2012, each time using the common address for New Era I and New Era II. Indeed, 

one employee of New Era I has testified that he and another employee continued 

working at New Era II, even though “somebody else bought the company.” 

23. Extensive evidence establishes ownership and/or control of New Era I 

and New Era II by the Management Group. First, both Pointe – which Gunabalan 

admitted to owning and Bazzi and El-Sayed also owned and/or controlled as 

discussed above – and New Era simultaneously employed the same occupational 

therapist, Megan Rutledge. Rutledge has testified that she worked at both 

facilities, alternated the days she worked between them, and received a single 

paycheck from Pointe for her work at both facilities. Moreover, Gigi John, the 

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paper owner of New Era II, is identified as the President of Pointe in the National 

Provider Identifier registry. See Ex. 5. Gunabalan testified that Gigi John worked 

for Pointe identifying and hiring physical therapists to work at Pointe. 

Additionally, as discussed more fully below, documentation from Pointe, New Era 

I and New Era II follows an almost identical pattern. 

24. At least two employees of New Era, Michelle Klaty and Tiffany 

Lyles, have testified that Bazzi appeared to be related to El-Sayed and to co-own 

New Era with El-Sayed. Klaty also testified that Bazzi would come into New Era 

to call patients who were not showing up for their appointments and would yell at 

them. 

25. The 2010 annual update for New Era II filed with the DELEG 

identifies Hala Moussa f/k/a Hala Makki (“Makki”) as the president, secretary, 

treasurer, and director of New Era II. Makki was formerly married to Bazzi’s first 

cousin. 

26. Klaty, Lyles and Joshi have also testified that El-Sayed managed, 

operated and directed the activities of New Era. In particular, although he was not 

a physical therapist or a doctor, El-Sayed: (a) routinely directed the treatment of 

patients, on occasion bringing patients back to New Era after New Era employees 

had attempted to discharge them because they had reached their maximum medical 

improvement; (b) directed the preparation of progress notes, and instructed 

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therapists to make changes on a weekly basis designed to reflect gradual patient 

improvement, regardless of the patient’s actual condition; (c) was involved in 

coordinating patients’ transportation to and from New Era through transportation 

companies that appeared to employees to be affiliated with New Era and/or ElSayed; (d) dealt with the patients’ attorneys; (e) managed efforts to hide the 

relationship with attorneys by instructing New Era employees to shred scheduling 

documents reflecting patients’ appointments with attorneys at the offices of New 

Era; (f) signed the lease for New Era; and (g) facilitated New Era’s transfer of 

paper ownership in November 2009 from Joshi to John without any involvement 

from Joshi. Klaty testified that El-Sayed had “so much control,” and was “the final 

word in a lot of things.” 

27. Moreover, El-Sayed was responsible for steering patients to New Era. 

Byron Schoolfield, M.D. (“Schoolfield”), who employed defendant Hoban at 

Internal Medicine Associates of Flint, P.C. (“IMA”), testified that: (a) “Dr. Hoban 

wasn’t as busy when he was first starting” at IMA, and so El-Sayed sent patients to 

IMA and “just asked Hoban if he would see [the] patients”; (b) “Sherif would refer 

[auto accident] patients to Internal Medicine Associates”; (c) with “just regular 

patients” who might need physical therapy it was Schoolfield’s practice to “be 

sending them . . . [to] different places”; (d) but with patients referred by El-Sayed 

the doctors would prescribe physical therapy and then “just . . . funnel them to 

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New Era”; (e) some files even had notations on them “MVA Sherif. MVA Sherif 

PT” and “MVA New Era. Go over report. MVA Sherif PT”; (f) patients were sent 

to New Era despite the fact that it was not providing records back to IMA 

regarding the physical therapy; (g) El-Sayed told Schoolfield the patients he 

brought in had to receive therapy from New Era because of an insurance company 

rule which would result in non-payment if they were sent anywhere else; and (h) 

Schoolfield thought New Era might belong to El-Sayed. In fact, Dr. Hoban treated 

57 of the New Era patients identified on Exhibit 2. See Ex. 2. 

2. The Prescribing Clinics 

28. The Prescribing Clinics are medical facilities at which physicians: (a) 

evaluated patients and wrote prescriptions for physical therapy and occupational 

therapy that would be provided by the Treatment Facilities; (b) signed disability 

certificates that could be used to increase the value of personal injury claims to 

further Defendants’ quid pro quo cross-referral relationships with attorneys and 

support charges for transportation; and (c) ordered unnecessary MRIs, many of 

which are performed at the MRI Facility owned by Gunabalan when patients fail to 

fully recover from the medically unnecessary physical therapy and occupational 

therapy. Despite representations to the contrary in public filings, all three 

Prescribing Clinics – Choice, Mundy and Medical Evaluations – were owned 

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and/or controlled by Gunabalan, El-Sayed and/or Bazzi, and were formed and used 

to steer patients to the Treatment Facilities. 

29. The connection between Choice, Mundy and Medical Evaluations, 

their role in the scheme, and the involvement of Gunabalan, El-Sayed and Bazzi in 

each Prescribing Clinic, manifest themselves in: (a) common Predetermined 

Protocols and documentation employed by each; (b) overlap of physicians 

employed by and associated with each (e.g., several physicians – including Ruden, 

Joel Milliner, Nazih Iskander, Jack Belen and Mark Brennan – have worked for 

Choice, Mundy and Medical Evaluations); and (c) testimony reflecting the 

connections and the active involvement and participation of Gunabalan, El-Sayed 

and Bazzi in each of the Prescribing Clinics. 

30. Similarly, Mundy and Medical Evaluations used the same billing 

company as New Era I, namely Global Medical Billing, Inc. Choice used the same 

billing company as Pointe and New Era II, namely Quick Healthcare Billing, Inc. 

Global Medical was incorporated and purportedly operated by Salma Sheikh a/k/a 

Salma Ali. Quick Healthcare Billing was incorporated by Muhammad Raza, but 

Dr. Raoof has testified that it was owned by Bazzi. 

31. Moreover, with respect to each particular Prescribing Clinic there is 

the following additional evidence reflecting the Management Group’s ownership 

and/or control: 

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 a. Choice 

32. Gunabalan was the sole shareholder of Choice. 

33. Dr. Mark Brennan, who worked at Choice, has testified that El-Sayed 

brought patients to Choice to be evaluated. 

34. Choice and Medical Evaluations were the Prescribing Clinics 

responsible for prescribing much of the medically unnecessary physical therapy 

and occupational therapy purportedly performed on the patients at Pointe. See Ex. 

1. 

b. Mundy 

35. Gunabalan was the sole shareholder of Mundy. 

36. One therapist who worked at New Era I testified that El-Sayed told 

her that he had opened Mundy, and El-Sayed himself has admitted that he 

“marketed” New Era’s services to Mundy. 

37. Ruden, who worked at both Mundy and Medical Evaluations, testified 

to seeing El-Sayed at both locations. 

38. Mundy was the Prescribing Clinic responsible for prescribing a great 

deal of the medically unnecessary physical therapy and occupational therapy 

purportedly performed on the patients at New Era I and II. See Ex. 2. 

c. Medical Evaluations 

39. While Beale has testified that he owns Medical Evaluations, and 

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Beale’s name appears on corporate filings with the DELEG, Beale is nothing more 

than a paper owner whose name was used to conceal Medical Evaluations’ true 

owners. 

40. Specifically, on February 28, 2008, Medical Evaluations & Testing, 

P.C. (“Medical Evaluations I”) was formed, purportedly by Terry Reznick, D.O. 

(“Reznick”), with an address of 20411 Twelve Mile Road, Southfield, Michigan. 

El-Sayed worked at Medical Evaluations I, purportedly as a manager. Beale 

testified that in approximately February 2009, he purchased Medical Evaluations I 

from Reznick, and on February 11, 2009, a new entity, Medical Evaluations, was 

formed, purportedly by Beale, using the same address as Medical Evaluations I. 

However, Reznick has testified that while he worked at Medical Evaluations I, he 

did not own it, was an employee, does not know Beale, and did not sell Medical 

Evaluations I to Beale. Reznick has stated that: (a) he did not fully understand or 

know who owned Medical Evaluations I when he was employed there; (b) he 

signed his employment contract with a woman named “Fay”; (c) Hala Makki 

managed Medical Evaluations I and had an office there; and (d) Amanda Bazzi 

was somehow involved and may have been a partner. Fatmeh Chebab who goes 

by “Faye” is Amanda Bazzi’s sister. As stated above, Makki was formerly married 

to Bazzi’s first cousin. 

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41. Dr. Milliner and Ruden, both of whom worked at Medical 

Evaluations, testified that they never met Beale. Milliner testified that El-Sayed 

owns Medical Evaluations. Ruden stated that he never saw Beale, the paper 

owner, but rather “it was mainly Sherif” El-Sayed who was running Medical 

Evaluations, who hired Ruden, and to whom Ruden reported, and that El-Sayed 

worked for Bazzi. 

42. Ruden further testified that it was Gunabalan who introduced him to 

Medical Evaluations and Gunabalan who actually paid him for his work at Medical 

Evaluations. Specifically, Ruden testified that he started working at Medical 

Evaluations because while he was working at Choice, Gunabalan “was looking for 

[Ruden] to have an extra day of work,” and Gunabalan “knew somebody [at 

Medical Evaluations],” namely El-Sayed, who hired him. Moreover, Ruden 

testified that when he worked at Medical Evaluations, he “was getting paid through 

one of Dr. Gunabalan’s umbrella companies,” Michigan Visiting Physicians, P.C. 

(“Michigan Visiting Physicians”). Gunabalan is, in fact, the incorporator, resident 

agent, and sole officer of Michigan Visiting Physicians, which, coincidentally, has 

an assumed name of Choice House Call. See Exs. 6 and 7. 

43. Dr. Irwin Lutwin, who worked at Medical Evaluations for ten years, 

testified that he does not know who owns it and that nobody “hired” him. 

B. First-Party Claims For PIP Benefits 

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44. Under the Michigan No-Fault Act, insurers are required to pay 

personal injury protection (“PIP”) benefits, including “allowable expenses 

consisting of all reasonable charges incurred for reasonably necessary products, 

services and accommodations for an injured person’s care, recovery or 

rehabilitation,” when those expenses are causally connected to an “accidental 

bodily injury arising out of the ownership, operation, maintenance or use of a 

motor vehicle.” MCL §§ 500.3105, 3107(1)(a). 

C. Tort Claims For Non-Economic Loss 

45. Individuals who are not substantially at fault for the accidents 

underlying their claims may also potentially recover: (a) non-economic losses, 

such as for pain and suffering, from the drivers who were at fault for the accidents 

(“At-Fault Drivers”) through a bodily injury claim (“BI Claim”), only in limited 

situations, including if the individual has suffered serious impairment of body 

function, see MCL § 500.3135; and (b) if recovery under the BI Claim is 

insufficient, from the patients’ own insurance companies through an underinsured 

or uninsured motorist claim (“UM Claim”). 

46. An individual has suffered serious impairment of body function when 

his general ability to conduct the course of his normal life has been affected as a 

result of his injury. A determination of serious impairment requires an analysis of 

several factors, including: (a) the nature and extent of the impairment; (b) the type 

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and length of treatment required; (c) the duration of the impairment; (d) the extent 

of any residual impairment; (e) the prognosis for eventual recovery; and (f) 

whether there is “objective manifestation” of the injury. 

D. Quid Pro Quo Relationships Between Defendants And PI 

 Attorneys 

47. The success of Defendants’ scheme depends heavily upon quid pro 

quo cross-referral relationships with PI Attorneys who represent patients in 

connection with BI Claims and UM Claims. Specifically, the PI Attorneys are 

motivated to refer patients to Defendants because the PI Attorneys can rely upon 

Defendants’ Predetermined Protocol to: (a) establish an “objective manifestation” 

of serious impairment of body function, which is required to satisfy the threshold 

for bringing tort liability claims for non-economic loss on behalf of the patients 

and their other clients; and (b) inflate the value of the BI Claims and UM Claims. 

This, in turn, increases the contingency fees available to the PI Attorneys through 

the BI Claims and UM Claims. At the same time, Defendants are motivated to 

refer patients to the PI Attorneys and provide them with bills and reports to curry 

favor with and induce more patient referrals from the PI Attorneys. 

48. Indeed, many of the patients for whom the Treatment Facilities 

submitted bills to State Farm were represented by a handful of PI Attorneys and 

law firms. See Exs. 1 and 2. Specifically, many of the patients for whom the 

Treatment Facilities submitted bills were represented by Weiner & Associates, 

2:14-cv-11700-PDB-MJH Doc # 1 Filed 04/29/14 Pg 22 of 95 Pg ID 22
23 

Wigod Falzon, or Ravid & Associates. See Exs. 1 and 2. Moreover, each of these 

firms represented patients who treated not just at Pointe but also New Era, even 

though New Era was located in Flint, Michigan, and none of these firms or PI 

Attorneys are located in the greater Flint area. 

E. Disability Certificates 

49. Another component of Defendants’ scheme involves the issuance of 

disability certificates through which the Prescribing Physicians and the Prescribing 

Clinics fraudulently certify that many patients are unable to work, drive, and/or 

perform household tasks. These certificates are issued for almost all of the patients 

of the Treatment Facilities, and are used to support claims for wage loss benefits, 

transportation, attendant care, and replacement services. See Exs. 1 and 2. 

50. Disability certificates are often provided to the Prescribing Physicians 

by the Management Group. In many instances, there is no discussion in the 

patient’s initial examination reports, progress notes or other medical charts about 

the patient’s specific home activities, driving abilities, work activities, or any other 

information that would allow a doctor to make a real assessment of the disabilities 

of the patient and the accommodations that may be medically necessary. 

Representative examples of the Prescribing Physicians’ disability certificates are 

attached hereto as Ex. 8. 

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24 

51. Among other things, these certifications enable patients to receive 

transportation to and from the Treatment Facilities, the Prescribing Clinics and the 

MRI Facility, at no cost to the patients, but at a significant cost to State Farm. By 

providing transportation at no cost to the patients, Defendants are able to maximize 

the likelihood that patients will attend their scheduled visits and continue 

treatment. 

52. Two transportation companies, Get Well Transport and Transport Us, 

provided transportation for many of the patients. See Exs. 1 and 2. Get Well 

Transport is owned by Hala Makki, who, as set forth above, is purportedly the sole 

officer and director of New Era II, and was formerly married to Bazzi’s cousin. At 

least one van that is used by Transport Us is registered to Tanya Bazzi, who shares 

an address with Amanda Bazzi at 5775 Golfview Drive, Dearborn Heights, 

Michigan. Otha Hodge, a driver for Get Well, testified that when he transported 

patients, he used Transport Us log sheets even though he was driving for Get Well. 

Get Well and Transport Us both used Global Billing for their billing, the company 

that provided billing services to Mundy, Medical Evaluations and New Era I. Dr. 

Schoolfield testified to his belief that El-Sayed was connected to transportation 

provided to patients of IMA. In fact, of the 30 Hoban patients at IMA identified 

on Exhibit 2, 19 received transportation services from Transport Us. See Ex. 2. 

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25 

53. The fees charged by Get Well and Transport Us produced significant 

profits. Get Well charged between $85 to $100 to transport patients to and from 

the Prescribing Clinics and the Treatment Facilities, and as much as $250 to take 

them to and from the MRI Facility. Transport Us charged between $75 to $90 to 

transport patients to and from the Prescribing Clinics and the Treatment Facilities, 

and as much as $265 to take them to and from the MRI Facility. In contrast, a 

patient taking a taxi in the Detroit area would pay $2.50 for the trip plus $1.60 per 

mile. Get Well and Transport Us, however, take advantage of Michigan’s NoFault laws and, knowing they are only submitting their bills to insurance 

companies like State Farm, charge significantly more. A comparison of their rates 

for a sample of patients in Exs. 1 and 2 can be seen below: 

Patient 

Claim No. Company Destination Miles Roundtrip Price Taxi 

Roundtrip Price 

Transportation 

Company 

22K360674 Get Well Pointe PT 9 $33.80 $85.00 

22C450882 Get Well BioMagnetic 14.6 $51.72 $250.00 

22124V176 Get Well Pointe PT 10.6 $38.92 $85.00 

22169P175 Get Well Pointe 12.4 $44.68 $100.00 

22A759905 Transport Us New Era 2.3 $12.36 $75.00 

22A914767 Transport Us New Era 11 $40.20 $80.00 

22K360769 Transport Us New Era 3.3 $15.56 $90.00 

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These charges are even more excessive when it is considered that, at times, Get 

Well and Transport Us transport multiple passengers in their vehicles at one time, 

allowing them to multiply their charges by the number of passengers. 

54. Based on the disability certificates and referrals, Get Well and 

Transport Us are able to obtain and profit from patients’ No-Fault Benefits. In 

turn, the “complimentary” transportation serves as an inducement to the patients to 

treat at the Prescribing Clinics, the Treatment Facilities and the MRI Facility and 

helps ensure that they will continue treatment as long as possible with maximum 

profit for all Defendants. By repeatedly and falsely certifying that the patients are 

disabled, the Prescribing Physicians and other physicians at the Prescribing Clinics 

ensure that their fraudulent scheme can continue by: (a) incentivizing patients to 

continue to treat at the Prescribing Clinics where they will receive disability 

certificates that can reimburse them for replacement services, attendant care, and 

wages; (b) providing them “free” transportation; and (c) benefiting the PI 

Attorneys by bolstering their clients’ BI and UM damages claims. 

55. Additionally, the disability findings: (a) support patients’ claims for 

replacement services (maximum of $20 per day for three years); (b) support 

patients’ claims for lost wages; (c) support patients’ claims for attendant care; (d) 

enable some patients to collect disability benefits; and (e) support the patients’ 

“objective manifestation” of injury to satisfy the threshold for BI or UM Claims. 

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Indeed, for the patients whom the Prescribing Physicians and Prescribing Clinics 

purportedly treated, State Farm paid more than $200,000 in replacement services, 

lost wages, transportation and attendant care. 

F. The Legitimate Treatment Of Injuries Arising Out Of Auto 

 Accidents 

 1. Patients With Strains And Sprains 

56. When an individual has been in a motor vehicle accident and 

complains of neck or back pain, a licensed professional must obtain a history and 

perform a legitimate examination to arrive at a legitimate diagnosis. Based upon a 

legitimate diagnosis, a licensed professional must engage in medical decisionmaking to design a legitimate treatment plan that is tailored to the unique 

circumstances of each patient. During the course of treatment, plans should be 

modified based upon the unique circumstances of each patient. As set forth herein, 

these basic principles were not followed by Defendants. 

57. Sprains and strains involve injuries to ligaments, muscles, and/or 

tendons. With a sprain, an individual’s ligaments, the connective tissues that join 

the bones together, are overstretched or torn. A strain occurs when a muscle 

and/or tendon is overstretched or torn. Treatment plans for individuals with strains 

and sprains may involve no treatment and/or medicines at all because many of 

these kinds of injuries may heal within weeks without any intervention, or may 

include a combination of medicines and passive and active modalities. 

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58. Passive modalities do not require any affirmative effort or movement 

by patients. There are many kinds of passive modalities including hot and cold 

packs, ultrasound, diathermy, traction, manual therapy, massage, and traction. 

Active modalities require patients to affirmatively participate in their treatment, 

and include many different kinds of stretching and strengthening exercises. 

59. Passive modalities are performed to reduce pain and to facilitate 

active modalities, which are performed to promote the healing of strains and 

sprains. In legitimate treatment plans, it is important to use passive modalities to 

the extent necessary to reduce pain and to facilitate active modalities, and to 

introduce active modalities as soon as practicable to promote healing of strains and 

sprains. 

60. The decision of which, if any, types of modalities are appropriate for 

each patient, as well as the level, frequency, and duration of the various modalities, 

should be individualized depending on the patient’s unique circumstances and 

response to treatment. Conversely, information obtained during an individualized 

history and physical examination can identify certain treatment that should not be 

undertaken as it would be detrimental to particular patients or mandate referral to 

particular specialists. 

61. Treatment plans, once implemented, should be periodically reassessed 

and modified based upon updated histories, re-examination findings, reported pain 

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levels, and return to functionality, all using well-documented decision-making 

processes. 

62. If patients are disabled due to their injury, a licensed professional 

must make an individualized evaluation of the patient’s diagnosed disabilities, 

expected length of treatment, and what specific accommodations are necessary in 

light of the patient’s work status, medical history, and daily activities. 

63. Patients should be discharged from treatment when they have reached 

maximum medical improvement, and/or when treatment results in no significant 

clinical improvement, such that no further treatment is likely to benefit the patient. 

64. The above-described process of history, examination, diagnostic 

studies, diagnosis, and treatment must be documented for the benefit of: (a) the 

licensed professionals involved in the patient’s care; (b) other licensed 

professionals who may treat the patient contemporaneously or subsequently; (c) 

the patients themselves whose care and condition necessarily depends on the 

documentation of this information; and (d) payors such as State Farm who must 

pay for reasonable and necessary treatment. 

2. Patients With Closed Head Injuries 

65. While closed head injuries, head trauma, concussions and headaches 

can result from an automobile accident, when they do occur, symptoms typically 

appear at the time of the accident or immediately thereafter. Such symptoms often 

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include loss of consciousness, nausea, vomiting, confusion, disorientation, 

distracted attention, sensory deficits, numbness, tingling, lack of coordination, 

olfactory deficits, ringing in the ears (tinnitus), motor deficits, altered speech, 

weakness in muscles, spasticity, vision issues or visual impairments, problems with 

spatial perception, problems with depth perception, and dizziness. Patients 

suffering such conditions are often treated in an emergency room at the time of an 

accident where medical professionals are alert to signs and symptoms of closed 

head injury and head trauma and record such symptoms if they exist. 

3. Treatment Was Designed To Benefit Defendants, Not 

 Patients 

66. As described next, Defendants’ patients were not legitimately 

examined, diagnosed, or treated for their unique conditions. Instead, they were 

subjected to a Predetermined Protocol in which the Prescribing Physicians and 

others employed by or associated with the Prescribing Clinics examine the patients 

to support predetermined prescriptions for physical therapy and occupational 

therapy, and the Treatment Facilities purport to provide virtually the same 

treatment to almost every patient on almost every visit for as long as possible, 

regardless of their unique conditions, needs, and progress, or lack thereof. 

Furthermore, the documentation of the examinations, diagnoses, and treatment 

submitted by the Prescribing Physicians, the Prescribing Clinics and the Treatment 

Facilities is fraudulent because the pervasive patterns in the documentation are not 

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credible, and the documentation reflects services that either were not performed or 

were not medically necessary because they were performed pursuant to the 

Predetermined Protocol that was designed to enrich Defendants, and not patients, 

by maximizing their collection of the patients’ No-Fault Benefits. 

G. Defendants’ Scheme And The Fraudulent Predetermined Protocol 

1. Patients And Solicitation 

67. As an initial matter, according to police reports, most of the Treatment 

Facilities’ patients reported either no injuries or minor injuries at the time of the 

accident. Moreover, more than half of the Treatment Facilities’ patients whose 

treatment was billed to State Farm did not receive emergency room treatment at the 

time of the accident. 

68. To procure patients for their scheme, Defendants employ and use 

runners, cappers, and steerers with the intent to obtain patients and to fraudulently 

obtain their No-Fault benefits from State Farm, in violation of MCL § 500.4503(h) 

and (i). This is an important aspect of the scheme because patients are the 

lifeblood of the scheme both for Defendants and for the PI Attorneys with whom 

Defendants have cross-referral relationships. 

69. Many patients were referred to the Treatment Facilities, Prescribing 

Clinics, and/or Prescribing Physicians by attorneys, investigators or solicitation 

services (“Solicitors”). Indeed, at least 20 individuals who treated at New Era and 

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14 individuals who treated at Pointe have stated that they were solicited by 

solicitors, including LegalGenius, PLLC (“LegalGenius”), who encouraged them 

to obtain medical care at the Treatment Facilities. 

70. Although LegalGenius holds itself out as the law firm of Michigan 

attorney Matthew Schwartz (“Schwartz”) based in Southfield, Michigan, it actually 

provides solicitation services for other attorneys. Specifically, several patients 

have testified that they were solicited by LegalGenius, yet none of them were 

represented by Schwartz or LegalGenius. For example: 

 Patient CS was contacted by an individual who claimed to work for 

LegalGenius. Through LegalGenius, CS retained an attorney who directed 

CS to Dr. Quiroga. CS then was directed to Pointe for physical therapy. 

 Patient, BM, was contacted by phone by an individual named Alex Jacobson 

(“Jacobson”) who worked for LegalGenius and testified that Jacobson said 

“everybody wants some money” and was “talking about suing somebody 

and . . . about going here and going there. And like I told my [insurance] 

agent, I’m not trying to sue nobody, I just want to make sure I’m well, that’s 

the bottom line.” Jacobson sent BM to Dr. Quiroga and then met with her at 

Dr. Quiroga’s office. 

 Patient BH testified that when she went to see Dr. Petre, someone from his 

office called “Alex” for her and Alex told her by phone that they could get 

her $20,000 if she would just fill out the forms and see the doctor. BH 

testified that after she talked to Jacobson she: 

started thinking . . . I don’t really want to do this, but they kept on 

saying, “Just fill out the papers, just fill out the papers.” And I’m 

thinking to myself I don’t really want to do this, I don’t even want to 

be involved in this, but I sat there, filled out the papers. 

 

 Patient KF was directed to Pointe by a solicitor who claimed to work for 

Injury Help Line. The solicitor directed patient KF to Dr. Rajendra Bothra 

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for evaluation where an attorney attempted to meet with KF at the doctor’s 

office. 

 Patient CH was directed by an investigator who works for a law firm to Dr. 

Quiroga, who then directed patient CH to Pointe for physical therapy. 

71. New Era employee Michelle Klaty testified that Kevin Geer was 

among the attorneys who saw patients in the offices of New Era I, where he would 

spend the entire day in a space provided for him. Tiffany Lyles testified that New 

Era set up its break room so that lawyers could meet clients and that patients of 

New Era I met with Geer and Ron Puzio in that room. Lyles described how 

patients informed her that they had been contacted in the first instance by lawyers. 

Both Geer and Puzio ultimately represented a number of New Era I patients. See 

Ex. 2. 

2. The Management Group Steered Patients Into Treatment 

 Through The Prescribing Clinics, The Prescribing 

 Physicians And Other Doctors 

72. The Management Group’s primary goal is to steer patients to the 

Treatment Facilities so they can profit from the Treatment Facilities’ submission of 

bills to insurers, like State Farm. To achieve this goal, the Management Group 

brings or refers patients to the Prescribing Clinics, Prescribing Physicians and 

other physicians with the understanding that the patients will be prescribed 

physical and/or occupational therapy, regardless of whether the patients actually 

need therapy, so that the Management Group can then steer the patients to the 

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Treatment Facilities. Further, the Management Group brings or refers patients to 

the Prescribing Physicians and Prescribing Clinics with the understanding that they 

will: (a) issue disability certificates to enable the patients to receive additional 

benefits, such as transportation to take them to and from their doctors and therapy 

appointments; and (b) prescribe MRIs, regardless of whether the patients actually 

need them, so that the Management Group can steer the patients to the MRI 

Facility owned by Gunabalan. It is critical to the success of the scheme that the 

Management Group can: (a) provide a ready stream of patients; and (b) control the 

physicians and thereby influence them into prescribing treatment at the Treatment 

Facilities. 

73. Indeed, several physicians have testified that the Management Group 

supplied their patients. For example, Dr. Raoof, who examined and prescribed 

therapy for several of the Pointe patients at issue, explained that Bazzi acted as a 

liaison with attorneys, attorneys would send their clients to Bazzi, and Bazzi would 

distribute them to “a dozen or more clinics.” Similarly, Dr. Milliner described 

patients arriving by the vanload at Medical Evaluations, which he said was owned 

by El-Sayed. Dr. Schoolfield explained how El-Sayed brought patients to IMA, 

while Brennan testified that El-Sayed brought patients to Choice. 

74. After the patients were brought to the Prescribing Clinics and 

Prescribing Physicians, it was understood by the physicians that they would 

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prescribe therapy, whether the patients needed it or not, and that the therapy would 

be provided at the Treatment Facilities. Dr. Milliner explained that under his 

arrangement with Medical Evaluations he “believe[d] that what they got out of it 

was that if they had a patient in an auto accident, they could refer for physical 

therapy,” and El-Sayed had a facility where the patients should go, namely Pointe. 

Dr. Schoolfield testified that: (a) patients brought to IMA by El-Sayed would be 

prescribed physical therapy, usually by Dr. Hoban; (b) patients were then sent to 

New Era by El-Sayed; (c) to signify and keep track of patients who were referred 

by the Management Group, files even had notations on them stating “MVA Sherif. 

MVA Sherif PT” and “MVA New Era. Go over report. MVA Sherif PT”; and (d) 

El-Sayed told Dr. Schoolfield that an insurance company rule required patients be 

sent for therapy to New Era. In fact, 57 of the 111 New Era patients identified on 

Exhibit 2 were treated by Dr. Hoban at IMA and Mundy. See Ex. 2. 

75. The Management Group uses its control and influence over the 

Prescribing Physicians to ensure that patients are prescribed therapy and sent to the 

Treatment Facilities. As Dr. Raoof explained, his practice at Pinnacle Medical 

Services was essentially controlled by the Management Group. “Amanda” 

installed El-Sayed as an office manager, El-Sayed paid all of Dr. Raoof’s medical 

assistants, utilities and rent, and Dr. Raoof did not have to pay any expenses. 

“Amanda’s” billing company handled Dr. Raoof’s billing and set his prices, and 

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36 

Dr. Raoof kept only 40% to 45% of the collections of the practice. This control 

provided Bazzi and El-Sayed with: (a) the ability to train Dr. Raoof’s staff on how 

to refer patients for physical therapy; and (b) leverage to pressure Dr. Raoof to 

prescribe physical therapy to “build the case up” although Dr. Raoof was 

“uncomfortable” and felt that the arrangement “morally [did not] sound right.” 

76. Similarly, the Management Group owned and controlled Medical 

Evaluations. Dr. Milliner was an independent contractor at Medical Evaluations 

and, through this arrangement in which Dr. Milliner paid nothing to use the 

facility, equipment and staff, El-Sayed provided patients, and the Management 

Group pressured Dr. Milliner to prescribe therapy and send patients to Pointe. 

After a month “it stopped feeling right” for Dr. Milliner because some patients had 

been in minor accidents and he did not understand why they needed therapy. In 

the case of Dr. Schoolfield, El-Sayed influenced the doctor to send patients to New 

Era through a false representation that an insurance company rule required 

treatment at New Era. 

77. Similarly, Dr. Lutwin, who worked at Medical Evaluations, testified 

that Medical Evaluations handles only “accident cases,” gets patient referrals from 

attorneys, and that among the attorneys who sent him a lot of patients was 

LegalGenius, though he did not know who they were. Lutwin described his 

arrangement as one in which he treats patients and bills under his own name and 

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37 

does not pay rent for his use of space. Rather, in exchange for rent-free space, 

Lutwin refers patients for physical therapy to physical therapy facilities owned by 

the owners of Medical Evaluations. As he stated, Medical Evaluations “own[s] a 

bunch of physical therapy places,” and they “get the physical therapy” out of the 

arrangement. All of Irwin’s patients got physical therapy. Each patient may be 

given a sheet of paper with different facilities from which to choose, but patients 

usually end up at “one of the Medical Evaluations facilities” because “that’s the 

payment for [his] rent.” 

78. In addition to steering patients to the Treatment Facilities, the 

Management Group also generated referrals for other medical services from which 

they stood to profit either directly or indirectly. For example, Dr. Raoof testified 

that “Amanda” trained Dr. Raoof’s staff on how to refer patients not only for 

physical therapy but for MRIs and electrodiagnostic testing. Dr. Milliner testified 

that when he ordered MRIs, El-Sayed sent all the patients to Bio-Magnetic, which 

is owned by Gunabalan. Dr. Schoolfield explained that El-Sayed provided his 

clinic with disability certificate forms and Dr. Schoolfield would later learn that, 

based on these disability certificates, patients were being transported through a 

transportation company connected to El-Sayed. 

79. Dr. Schoolfield also explained that El-Sayed patients were prescribed 

MRIs and other diagnostic testing that El-Sayed was involved in providing. As 

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38 

discussed above, El-Sayed arranged for Hoban to work for Dr. Schoolfield at IMA 

and provided him with patients to treat. Hoban worked at both IMA and Mundy. 

Many of Hoban’s patients, whose treatment at the Treatment Facilities was billed 

to State Farm, had MRIs at Biomagnetic. Indeed, 20 out of the 30 patients 

identified in Exhibit 2 that Hoban purported to examine at IMA were sent to 

Biomagnetic for MRIs despite that Flint is more than 50 miles from the 

Biomagnetic MRI facility. 

80. Based upon the similarities in the structure, associated individuals, 

and activities of Pinnacle, Medical Evaluations, Choice, Mundy, Pointe and New 

Era, it appears that the Prescribing Physicians and Prescribing Clinics had the same 

or similar arrangement with El-Sayed and Amanda Bazzi, pursuant to which the 

Prescribing Physicians and Prescribing Clinics fraudulently prescribed medically 

unnecessary physical and occupational therapy for patients of the Treatment 

Facilities, in return for which the Management Group steered patients to the 

Prescribing Physicians and Prescribing Clinics for examinations, and either split 

the fees or allowed the Prescribing Physicians to collect their own bills without 

incurring any costs, such as for rent, staff or equipment. 

3. Fraudulent Initial And Follow-Up Examinations And 

 Diagnoses, And Treatment Plans 

81. The Prescribing Physicians and Prescribing Clinics’ role is essential to 

the scheme. Under Michigan law, physical therapy services can only be performed 

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39 

if a licensed health care provider, such as a medical doctor, prescribes the services. 

See Mich. Pub. Health Code § 333.17820(1). Moreover, physical therapy 

prescriptions expire after 90 days, so if therapy is to continue beyond this point, a 

new prescription is required. See 2010 Mich. Admin. Code R. 338.7122. As such, 

the Treatment Facilities rely on the Prescribing Physicians and the Prescribing 

Clinics to prescribe physical therapy services. Without these prescriptions, the 

Treatment Facilities would lose their only source of revenue. 

82. Accordingly, the first step in the Predetermined Protocol is an initial 

examination by one of the Prescribing Physicians or another physician employed 

by and associated with the Prescribing Clinics, after which treatment at the 

Treatment Facilities is inevitably prescribed. Based on the initial examination 

findings, the Prescribing Physicians and other physicians employed by and 

associated with the Prescribing Clinics diagnose patients with sprains and strains of 

the cervical, thoracic and/or lumbar regions of the back, as well as other 

conditions. See Ex. 9. In the majority of cases, patients are diagnosed with 

conditions in at least two regions of the spine. See Exs. 1 and 2. The Prescribing 

Physicians then prescribe physical therapy for the patients they examine, prepare 

reports summarizing their examinations, and issue prescriptions for treatment at the 

Treatment Facilities. The Prescribing Physicians routinely specify that physical 

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therapy should be provided three times per week for four weeks. See sample 

prescriptions, attached as Ex. 10. 

83. In approximately early 2010, when Pointe hired an occupational 

therapist and then in approximately October or November 2010, when the 

occupational therapist began working at New Era, the Predetermined Protocol was 

modified at the respective facilities to include occupational therapy. Although a 

prescription is not required under Michigan law to perform occupational therapy, 

the Prescribing Physicians and Prescribing Clinics began to prescribe both physical 

and occupational therapy services. See Exs. 1 and 2. Significantly, none of the 

patients of Pointe whose treatment was billed to State Farm were prescribed 

occupational therapy before February 2010, and none of the patients of New Era 

whose treatment was billed to State Farm were prescribed occupational therapy 

before October 2010. See Exs. 1 and 2. Such occupational therapy was 

purportedly prescribed to treat primarily cervical or upper sprains and strains and 

also purported head trauma, headaches and closed head injuries. Despite the fact 

that headaches and closed head injuries caused by an automobile accident typically 

appear at or about the time of the accident, in many instances, patients were not 

diagnosed with headaches or closed head injuries until later, were only diagnosed 

with such injuries after another examination in which there had been no indication 

of such an injury, and were, in fact, diagnosed with such injuries to justify 

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41 

occupational therapy. See Ex. 3. Occupational therapy services were not added to 

the Predetermined Protocol for the benefit of patients, but rather, to financially 

enrich Defendants by generating higher profits. The diagnoses are not credible and 

reflect a predetermined justification for occupational therapy because: (a) if they 

had been legitimate conditions they would have manifested themselves earlier; (b) 

if they had been legitimate there should not have been earlier diagnoses that 

omitted any reference to such a condition; and (c) it is unlikely that patients 

suffered from such conditions given that the majority of the Treatment Facilities’ 

patients reported no injuries or minor injuries at the time of the accident and many 

did not seek emergency room care. 

84. Indeed, in the case of patient NA, the patient showed no sign of 

headaches or head trauma during initial and follow-up evaluations performed by an 

unrelated provider on May 10, 2010 and May 17, 2010. See Ex. 11. To the 

contrary, the provider noted that the patient was involved in an accident on April 

23, 2010 and expressly reported that, according to the patient, there was “[n]o head 

injury or loss of consciousness” and, based on the provider’s examination, there 

were “[n]o headaches, no [head] swelling, no [head] injuries.” See id. 

Nevertheless, on May 20, 2010, just days later and almost a month after the 

accident, Dr. Quiroga purported to conduct an initial examination of patient NA, 

reported that “the patient has had posttraumatic headaches approximately four 

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42 

episodes a week lasting one to two hours,” and diagnosed the patient with 

“Posttraumatic headaches.” Id. Dr. Quiroga then recommended “[p]hysical 

therapy and occupational therapy three sessions a week x4 weeks.” Id. If the head 

injury had been legitimate and caused by the automobile accident, it likely would 

have been observed shortly after the accident. Further, Dr. Quiroga’s report and 

findings directly contradict the patient history and findings of the earlier provider, 

which explicitly noted the patient did not suffer from such a condition. 

85. Another patient who purportedly received occupational therapy, SH, 

testified that she did not receive occupational therapy and that Rutledge provided 

physical therapy. 

86. In approximately September 2011, occupational therapist Rutledge 

stopped working at New Era, and in June 2012 stopped working at Pointe. As a 

result, patients stopped receiving occupational therapy at the Treatment Facilities. 

In many instances, patients who had purportedly received occupational therapy to 

the cervical region continued receiving the same treatment which was simply 

recharacterized as physical therapy to the cervical region. 

87. In support of the continuation of physical therapy and occupational 

therapy, and also to justify charges for additional examinations by the Prescribing 

Physicians and Prescribing Clinics, after a period of physical therapy and/or 

occupational therapy, patients are subjected to purported follow-up visits with the 

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Prescribing Physicians and Prescribing Clinics. Like the initial examinations, 

these follow-up visits involve, at most, cursory exams of the patients to support 

pre-determined prescriptions for a continuation of the treatment at the Treatment 

Facilities. Some reports of these follow-up visits purport to indicate slight 

improvement in the patients, while others show no improvement at all. But 

virtually every report identifies conditions that require continuation of the 

Predetermined Protocol, despite the fact that the patients have purportedly 

undergone extensive treatment at the Treatment Facilities. 

88. In most instances, documentation prepared by the Prescribing 

Physicians, Prescribing Clinics and others associated with the Prescribing Clinics, 

and submitted to State Farm includes: (a) reports of initial examinations; (b) 

reports of follow-up visits; and (c) prescriptions. Such documentation reflects that 

Prescribing Physicians and those employed by and associated with the Prescribing 

Clinics were not providing individualized diagnoses and treatment, but rather were 

conducting, at most, cursory examinations and issuing predetermined prescriptions 

to support the continuation of the Predetermined Protocol. 

89. A similar prescription form, with similar fields, was used by the 

Prescribing Physicians and those employed by and associated with the Prescribing 

Clinics. See sample prescriptions, Ex. 10. Prescriptions for physical therapy and 

occupational therapy typically ordered treatment three times per week for four 

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weeks. Indeed, the order was so common that some prescription forms had the 

directive for three times per week for four weeks already printed on the form, and 

some also included the physician’s name pre-printed on the form so that the 

Prescribing Physicians would not even need to take the time to sign the forms. See

Ex. 12. 

90. The prescription forms often included fields in which a diagnosis 

could be indicated. On occasions when these fields were completed, limited and 

vague descriptions were used, and reflected diagnoses of sprain or strain of the 

cervical, thoracic and/or lumbar region of the spine. In most instances, patients 

were diagnosed with conditions in at least two regions of the spine and in many 

instances, three regions of the spine. See Exs. 1 and 2. When prescriptions were 

written for occupational therapy, the diagnoses on the prescriptions sometimes also 

included references to head trauma, headaches and closed head injuries or “CHI,” 

purportedly to provide further support for both occupational therapy and physical 

therapy. See Ex. 3. Indeed, many patients of the Treatment Facilities whose 

treatment was billed to State Farm and who were diagnosed with head injuries 

were first diagnosed with such injuries in the first half of 2010, and many of these 

patients were then prescribed occupational therapy. See Ex. 3. 

91. Prescriptions for physical therapy and/or occupational therapy were 

regularly renewed, with the renewed prescriptions following the same boilerplate 

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diagnoses and directive for therapy of three times per week for four weeks. 

Diagnoses varied little among patients and changed little for individual patients 

over the course of their treatment despite the fact that one would expect to see 

individualized diagnoses and treatment and some change in patients’ conditions 

over time. 

92. Additionally, initial evaluations and follow-up examinations reflect 

the complete failure to provide appropriate, individualized care. Incomplete 

histories are reported, if they are taken at all, reflecting failures to inquire about 

sensory complaints and weakness or to record information from previous providers 

or testing. On frequent occasions, there is no correlation between and among 

patient diagnoses rendered in the emergency room, initial examinations or followup examinations performed by the Prescribing Physicians or initial examinations 

preformed at the Treatment Facilitates. Unnecessary diagnostic tests, such as 

MRIs, are ordered and performed although: (a) there is no justification for the tests 

in the reported physical findings; and (b) there is no change in treatment as a result 

of the testing. Despite the fact that the Prescribing Physicians failed to provide 

individualized care and their initial and follow-up examinations served no purpose 

other than to justify unnecessary physical and occupational therapy and additional 

testing, the Prescribing Physicians and Prescribing Clinics submit bills to State 

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Farm for their initial and follow-up examinations, examples of which are attached 

as Ex. 13. 

93. Additionally, the Prescribing Physicians routinely sign disability 

certificates, examples of which are attached as Ex. 8, pursuant to which they find 

patients to be partially or totally disabled, and restrict standing, sitting, 

bending/twisting, pulling/pushing, lifting, housekeeping activities, and/or driving. 

See also Exs. 1 and 2. 

 a. Gunabalan Documentation 

94. In addition to Gunabalan’s his role in the Management Group, 

pursuant to which he owned and/or controlled the Prescribing Clinics, Treatment 

Facilities, and Bio-Magnetic, Gunabalan also occasionally examined patients who 

he referred to the Treatment Facilities. From approximately June 2008 through at 

least March 2010, Gunabalan has purported to perform initial examinations and 

follow-up visits on patients who treated at the Treatment Facilities. See Ex. 14. In 

those instances, Gunabalan usually purports to diagnose patients with conditions in 

at least two regions of spine or parts of the back. See Exs. 1 and 2. The reports 

conclude that patients suffer from sprains or strains and may suffer from 

radiculopathy in at least two regions of the spine, as well as other conditions. 

Gunabalan’s reports recommend, among other things, the commencement or 

continuation of therapy. 

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95. The prescriptions that Gunabalan wrote for therapy that was billed to 

State Farm by the Treatment Facilities were for treatment to be provided three 

times per week for four weeks. Such prescriptions diagnosed strains in at least two 

regions of the spine and direct the therapist to evaluate and treat those areas. See 

Ex. 16. In addition, in order to support treatment by the occupational therapist who 

was hired by Pointe in early 2010, Gunabalan also prescribed occupational therapy 

in addition to physical therapy beginning in February 2010. Occupational therapy 

was not prescribed for Pointe patients before the occupational therapist began 

working there. See Exs. 3 and 16. 

b. Quiroga Documentation 

96. From approximately March 2010 through at least December 2012, Dr. 

Quiroga has purported to perform initial examinations and follow-up visits on a 

significant number of patients treated at the Treatment Facilities. See Ex. 15. Dr. 

Quiroga purports to diagnose many patients with conditions in all three regions of 

the spine (cervical, thoracic and lumbar), and virtually every patient is diagnosed 

with symptoms in at least two regions. See Exs. 1 and 2. In many instances, pain 

is purportedly reported at between five and eight on a scale of ten, in which ten is 

the most severe pain and one the least severe, and in most instances such pain is 

described as radiating down at least one extremity. The majority of patients are 

reported to have paraspinal muscle spasms, spinous process tenderness, positive 

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straight leg raises at between 30o and 45o meaning pain is produced when the leg is 

lifted to that angle, and decreased flexion and extension. Many patients also have 

positive Spurling test results, which is indicative of radiculopathy in the cervical 

spine. The reports routinely conclude that patients suffer from sprains or strains 

and may suffer from radiculopathy in at least two and often three regions of the 

spine, as well as other conditions. Dr. Quiroga’s reports typically conclude by 

recommending, among other things, the commencement or continuation of 

therapy, and state, often in identical or substantially similar language, that “goals 

[are to] be restoration of motor deficits, reduction of pain, and increased range of 

motion.” See, e.g., Ex. 15. 

97. Virtually every prescription that Dr. Quiroga wrote for therapy that 

was billed to State Farm by the Treatment Facilities was for treatment to be 

provided three times per week for four weeks. Indeed, many have this directive 

pre-printed on the form along with Dr. Quiroga’s name. Virtually all of his 

prescriptions for physical therapy diagnose strains and/or radiculopathy in at least 

two and in many cases three regions of the spine and direct the therapist to evaluate 

and treat those areas. 

98. In addition, in order to support treatment by the occupational therapist 

who was hired by Pointe in 2010, Quiroga prescribed occupational therapy for 

Pointe patients beginning in approximately September 2010. See Ex. 1. When the 

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occupational therapist began working at New Era in approximately October or 

November 2010, Quiroga began prescribing occupational therapy for New Era 

patients in October 2010. See Ex. 2. Occupational therapy was not prescribed for 

any of the Treatment Facility patients before the occupational therapist began 

working at each of the respective facilities. See Exs. 1 and 2. Some of Quiroga’s 

occupational therapy prescriptions are directed towards cervical or upper spine 

conditions, and many purport to justify the occupational therapy treatment by 

identifying head injuries such as “post traumatic h.a. [headach],” “post concussive 

H.A.,” or “post MVA H/A.” See Exs. 3 and 16. 

 c. Ruden Documentation 

99. From approximately May 2009 through at least July 2012, Dr. Ruden 

has purported to perform initial examinations and follow-up visits on a significant 

number of patients who treated at the Treatment Facilities. See Ex. 17. Like Dr. 

Quiroga, Dr. Ruden purports to diagnose many patients with conditions in at least 

two regions of the spine or body. See Ex. 1. In some instances, he prepares only 

prescriptions and does not even summarize his examinations in a report. In those 

instances where he does summarize his examinations, he describes patients 

suffering from pain and strains or sprains in at least two regions of the spine. 

Many patients are also reported to have paraspinal tenderness and decreased range 

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of motion. Dr. Ruden’s reports conclude by recommending, among other things, 

the commencement or continuation of therapy. 

100. Most prescriptions that Dr. Ruden wrote for therapy that was billed to 

State Farm by the Treatment Facilities were for treatment to be provided three 

times per week for four weeks. His prescriptions for physical therapy diagnose 

strains and/or radiculopathy in at least two regions of the spine and direct the 

therapist to evaluate and treat those areas. Indeed, many have this directive preprinted on the form along with the doctor’s name. 

101. In order to support treatment by the occupational therapist who was 

hired by the Treatment Facilities in 2010, Dr. Ruden prescribed occupational 

therapy in addition to physical therapy beginning in November 2010. Some of 

these occupational therapy prescriptions purport to justify the occupational therapy 

treatment by identifying head injuries and direct treatment and evaluation of these 

areas. See, e.g., Ex. 3. 

 d. Beale Documentation 

102. From approximately April 2009 through at least September 2013, 

Dr. Beale and physicians employed by and associated with his professional 

corporation, Medical Evaluations, purported to perform initial examinations and 

follow-up visits on patients who treated at the Treatment Facilities. See Ex. 18. 

Dr. Beale purports to diagnose the majority of patients he treated for whom the 

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Treatment Facilities billed State Farm with conditions in at least two regions of the 

spine. Many of these patients also suffered tenderness and decreased range of 

motion and were diagnosed with various forms of sprains. Dr. Beale then 

prescribes a treatment plan that includes physical therapy and regularly concludes 

that the patient is disabled from “bending, lifting, twisting, turning, pushing, 

pulling and squatting,” and needs to be re-evaluated in four to six weeks. 

Dr. Beale also prescribes MRIs. See Ex. 27. Beginning in 2010, after Pointe hired 

an occupational therapist, Beale also began to diagnose patients with head injuries 

and his reports begin to reflect that the patients suffer from headaches and his 

recommendations and treatment plans include directives for “CLOSED HEAD 

INJURY EVALUATION” or “MONITOR THE HEADACHES.” See Ex. 3. 

103. Most prescriptions that Dr. Beale wrote for therapy that was billed to 

State Farm by the Treatment Facilities were for treatment to be provided three 

times per week for four to eight weeks. Most of these prescriptions diagnose 

conditions in at least two regions of the spine. 

104. In order to support treatment by the occupational therapist who was 

hired by Pointe in 2010, Dr. Beale also prescribed occupational therapy in addition 

to physical therapy beginning in June 2010. See Exs. 1 and 2. Dr. Beale 

prescribed occupational therapy in addition to physical therapy by issuing physical 

therapy prescriptions in which he simply added “OT” as additional treatment, or 

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blanket prescriptions designated as “Prescriptions for Physical and Occupational 

Therapy.” Occupational therapy was typically prescribed for patients with cervical 

or upper spine issues or for patients with head injuries, and was not prescribed for 

Pointe patients before the occupational therapist began working there. 

 e. Hoban Documentation 

105. From approximately January 2008 through at least January 2014, 

Hoban has purported to perform initial examinations and follow-up visits on 

patients who treated at New Era I and II. See Ex. 19. Based on his initial 

examination findings, Hoban diagnoses patients with sprains and strains of the 

cervical and/or lumbar regions of the back, as well as other vague conditions, such 

as “whiplash-type injury.” See id.

106. The documentation that Hoban submits to State Farm typically 

consists of a one-page report and sometimes even shorter, which establishes that 

Hoban fails to properly examine the patients because he does not perform reflex, 

motor or sensory testing, and does not quantify limitations, if any, to range of 

motion, if he documents range of motion at all. Other pervasive patterns in 

Hoban’s reports include: (a) chief complaints of pain in the neck and/or back, that 

are general and non-specific; (b) minimal or complete lack of any medical or 

surgical history; (c) a failure to review systems; (d) lengthy narrative descriptions 

of the motor vehicle accident consistent with a lack of fault on the part of the 

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patient; (e) routine prescriptions for narcotic pain medication; (f) a failure to 

perform and/or document neurological exams even where patients complain of 

tingling or numbness in their hands; (g) instructions for the patient to return in four 

weeks; and (h) statements that appear to be designed to rebut malingering 

allegations, such as that a patient “is a very good patient who does not exaggerate 

her complaints,” “states, and I believe her, that she is not able to work,” or “is not a 

malingering patient.” 

107. It is predetermined that Hoban will prescribe “physiotherapy” two to 

three times per week for four weeks. In addition, in order to support treatment by 

the occupational therapist who began working at New Era in approximately 

October or November 2010, Hoban also began to prescribe occupational therapy 

for patients in early 2011. Occupational therapy was typically prescribed for 

patients with cervical or upper spine issues, and was not prescribed for New Era 

patients before the occupational therapist began working there. 

108. Additionally, Hoban routinely signs Disability Certificates, examples 

of which are attached as Ex. 20, pursuant to which he finds patients to be partially 

or totally disabled, and restricts standing, sitting, bending/twisting, 

pulling/pushing, lifting, housekeeping activities, and/or driving. See Ex. 2. 

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109. Thereafter, Hoban purports to re-examine the patient the following 

month, at which point he renders the same predetermined diagnosis, and sends the 

patient back to the New Era for another four weeks of the same physical therapy. 

4. The Prescribing Physician’s Prescriptions Were Not Based 

 On The Patients’ Unique Needs 

110. Many of the Prescribing Physicians’ prescriptions resulted in therapy 

being prescribed and provided in some cases for up to a year or more. See Exs. 1 

and 2. Indeed, in the case of some New Era patients, treatment continued for 

multiple years. See Ex. 2. There was no justification for physical therapy or 

occupational therapy to continue for so long, and certainly not in the vast majority 

of cases, given that legitimate treatment for individuals with strains and sprains 

often involves no treatment at all because many of these kinds of injuries heal 

within weeks without any intervention, and even where such treatment is 

appropriate it typically requires no more than four to six weeks. 

5. The Fraudulent Physical Therapy And Occupational 

 Therapy Examinations And Treatment 

111. After patients receive their physical therapy prescriptions and/or 

occupational therapy prescriptions from the Prescribing Physicians, the Prescribing 

Clinics, or another physician, they begin the Predetermined Protocol at either 

Pointe or New Era. Regardless of whether the patient goes to Pointe or New Era, 

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on the first visit, each patient is purportedly examined by one of the Treatment 

Facilities’ physical and/or occupational therapists. 

112. Patients typically begin physical and/or occupational therapy the same 

day that the initial evaluations are purportedly performed, if they receive therapy at 

all. A number of individuals have reported that they did not receive some or all of 

the treatment for which the Treatment Facilities billed. For example, patient WJ, 

for whom New Era billed massage at least 49 times, testified that she never 

received massage. In addition, as set forth in paragraph 85 above, a patient who 

purportedly received occupational therapy testified to not having received 

occupational therapy services. 

113. Although it is well-established that stretching and physical exercise 

are the primary forms of rehabilitation for soft tissue injuries of the neck and back, 

the Predetermined Protocol is heavily reliant on passive modalities that permit the 

Treatment Facilities to maximize profits by submitting multiple charges for 

multiple modalities purportedly performed on each visit. 

114. On most visits to the Treatment Facilities, patients purportedly receive 

the same five modalities, namely (a) hot and/or cold packs, (b) electrical 

stimulation, (c) ultrasound, (d) therapeutic exercise, and (e) massage or manual 

therapy. See Exs. 1 and 2. The Treatment Facilities provide the foregoing 

modalities, if they provide them at all, pursuant to the Predetermined Protocol and 

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to increase the charges they can submit to and collect from State Farm. Indeed, 

while any one of these treatment modalities might be medically necessary for a 

particular patient on a particular day, this comprehensive combination of 

treatments is seldom, if ever, medically necessary for any patient on any day, let 

alone on most visits. 

115. In addition, beginning in early 2010, at Pointe and in approximately 

October or November 2010 at New Era, some patients would purportedly be 

subjected to certain of the regular passive modalities – most commonly hot and/or 

cold packs and electrical stimulation – twice on each visit, once by a physical 

therapist and once by an occupational therapist. This was not done to benefit the 

patient, but to allow the facilities to double-bill for these modalities. Patients for 

whom double-billing occurred are identified in Exhibits 1 and 2. Moreover, the 

addition of an occupational therapist resulted in the Treatment Facilities purporting 

to provide and bill for yet another service, self-care training, which had never been 

provided or purportedly needed before the occupational therapist arrived and was 

never provided or apparently needed after she left the respective Treatment 

Facilities. See Exs. 1 and 2. 

116. Indeed, there is no legitimate medical explanation for the Treatment 

Facilities’ provision of the same modalities by an occupational therapist and 

physical therapist on the same date of service to different parts of the body. 

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Licensed physical therapists and licensed occupational therapists can provide 

therapy to the entire body. Despite this fact, therapists employed by the Treatment 

Facilities have repeatedly testified that they were instructed to employ a division of 

labor whereby the physical therapist treated the lower portion (from the waist 

down), and the occupational therapist treated the upper portion (from the waist up). 

No therapist has been able to provide a medical explanation for this practice. 

Moreover, as set forth above, patients who purportedly received occupational 

therapy have testified that they did not know they were receiving these services 

and thought Rutledge was a physical therapist. In fact, this division of labor 

between the physical therapist and occupational therapist served no purpose other 

than to financially enrich Defendants by allowing them to double-bill for the same 

modalities allegedly provided to the same patient on the same day. 

117. In approximately November 2011, the occupational therapist Rutledge 

stopped working at New Era and, in approximately June 2012, stopped working at 

Pointe. As a result, the Treatment Facilities stopped providing occupational 

therapy services to the patients of these facilities after these dates and many 

patients who had purportedly received occupational therapy to the cervical region 

began receiving the same treatment which was then characterized as physical 

therapy to the cervical region. 

118. Although soft-tissue injuries often resolve themselves within a matter 

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of weeks without any intervention, most patients purport to treat at the Treatment 

Facilities for well beyond the commonly accepted treatment period for soft tissue 

injuries of four to six weeks. Many patients have stated that despite their extensive 

physical and/or occupational therapy, their physical condition did not improve. 

Moreover, patients were rarely discharged. 

119. To support the Treatment Facilities’ charges for the physical therapy 

and occupational therapy, the Treatment Facilities create and submit to State Farm 

(a) Plans of Treatment for Outpatient Rehabilitation (“Plans of Treatment”); (b) 

Updated Plans of Progress for Outpatient Rehabilitation (“Updated Plans”); (c) 

physical therapy and occupational therapy Treatment Records and Progress Notes 

(“Progress Notes”); and (d) check lists purporting to reflect particular modalities 

administered to patients on particular days over a week (“Check Lists”). The 

information in these documents is predetermined and the forms are fraudulent. 

Sample Plans of Treatment and Updated Plans are attached as Ex. 21. Sample 

Progress Notes and Check Lists are attached as Ex. 22. 

120. For example, New Era employees have testified that they were 

instructed to prepare weekly reports, as opposed to daily reports, were told not to 

document pain levels, and were not permitted to maintain the therapists’ daily 

handwritten notes in the file. As a result, the weekly notes did not accurately 

reflect the patients’ conditions. Indeed, one employee testified that there was a 

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“master note” that came from another clinic where Joshi had worked that he loaded 

onto the computer, and instructed employees to use for the patients at New Era. 

Specifically, Joshi instructed employees on how many modalities patients needed 

to have as a matter of course, and provided them with a document setting forth 

how to break down the modalities per week, and what information to add to the 

weekly notes. Employees were not allowed to use their training, knowledge, or 

experience to formulate complete and accurate notes. Moreover, although Joshi 

did not typically provide physical therapy for the patients at New Era I, he directed 

treatment by not only instructing employees to add more modalities to the patients’ 

treatment plans, but by refusing to allow patients to be discharged. Finally, Joshi 

instructed untrained technicians at New Era I to provide electrical stimulation and 

ultrasound to patients, even though they were not permitted by law to provide these 

modalities. 

121. Consistent with the foregoing employee testimony, Plans of 

Treatment and Updated Plans are similar forms and contain similar information 

though the former was typically prepared on the patients’ first visit to the 

Treatment Facility, while the latter was prepared periodically as the treatment 

continued. Both forms typically included a description of the patients’ diagnoses, 

short term goals, long term goals, a plan to accomplish such goals and an 

assessment of the patient. While these forms should have reflected individualized 

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treatment of patients, they in fact vary little from patient to patient or over the 

course of any one patient’s care, and all are designed to establish that the patient is 

an excellent candidate for therapy. In the description of goals and the initial 

assessment, many forms indicate that the patient suffers from significant pain 

between level six and nine on a scale of one to ten, with ten being the most severe 

and one being the least severe. Pain is reported in at least two but often three 

regions of the spine, thus purporting to justify treatment of the entire body. 

Remarkably, in many instances, the locations and level of pain identified differ 

from that which has previously been recorded by the Prescribing Physicians and 

Prescribing Clinics in their reports. While Updated Plans periodically show 

changes in the level of pain, rarely if ever is pain reduced to the point that care may 

be suspended. 

122. The Plans of Treatment and Updated Plans repeatedly use the same 

phrases and descriptions. For example, reports at both New Era and Pointe purport 

to document that: (a) patients often have tenderness at multiple levels ranging from 

level two to four on a scale of one to five in which five is the most severe; (b) 

patients often have spasms ranging from level two to four on a scale of one to five 

in which five in the most severe; (c) patients have limitations in range of motion 

due to pain; and (d) patients have difficulty with a variety of tasks including 

getting up from a low height chair, going up and down stairs, sleeping on their 

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sides for a period time, lifting objects, sitting and watching television for a period 

of time, grooming and bathing and reaching. Many patients were recorded to have 

a four out of five level of spasm during the treatment, which supposedly improved 

over the course of treatment to three out of five. Similarly, many patients were 

recorded to have a four out of five level of tenderness, which supposedly improved 

over the course of treatment to three out of five. Despite that the New Era and 

Pointe reports purport to document spasms and tenderness by scale, no generally 

accepted scale exists for spasms or tenderness. In 2010, after the Treatment 

Facilities had employed an occupational therapist, the documents also began to 

report headaches, often severe, accompanied by complaints of pain of at least 

seven out of ten on a scale of one to ten with ten being the most severe. 

123. Both forms contain a plan of treatment that invariably includes not 

only the same modalities – hot and/or cold packs, electrical stimulation, 

ultrasound, therapeutic exercise and manual therapy – but in many cases provide 

that each such modalities should be administered for the same amount of time, 

specifically, ultrasound for “6 to 8 minutes,” electrical stimulation for “15 to 20” 

minutes, therapeutic exercise for “15 to 30 minutes,” and massage or manual 

therapy for ten minutes. The reports conclude by noting that the patient has “good 

rehab potential and would benefit from . . . skilled therapy . . . 2-3 times a week for 

4 weeks to achieve set goals.” Despite the fact that the Updated Plan is prepared 

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after the patient has purportedly undergone a period of treatment, these forms 

virtually always indicate that, to date, long term goals are “not met” and it is 

necessary to “continue services.” Nevertheless, changes are not made to the 

treatment plan. 

124. Plans of Treatment and Updated Plans provide for review by a 

physician who is required to sign and “certify the need for these services furnished 

under this plan of treatment and while under my care.” The Plans were reviewed 

by the Prescribing Physicians, physicians employed by and associated with the 

Prescribing Clinics, including Gunabalan, and in most instances contain the 

physician’s signature. In this way, the Prescribing Physicians and physicians 

employed by and associated with the Prescribing Clinics were fully aware of and 

authorized the Predetermined Protocol that was being applied to their patients’ 

care. As Gunabalan himself testified, the Plans reflect “what the therapist 

recommended and the doctor generally agrees and signs off,” but if the doctor does 

not believe the plan or the modalities involved are appropriate or necessary “he 

may change it.” State Farm is not aware of any situation where Gunabalan or any 

other Prescribing Physician changed a patient’s treatment plan. 

125. Remarkably, on some occasions, physicians who were not even 

involved in a particular patient’s care signed the plans. Gunabalan himself 

admitted that he signed several plans for the therapy for a patient that he never 

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treated, including one that was dated before that patient had been examined by any 

physician. Indeed, on occasions, Gunabalan signed plans before the occupational 

or physical therapist evaluated the patient on the first or “start of service” date 

(“SOC” date), and he admitted in testimony to having signed treatment plans 

where he had not even seen and was not treating the patient. See Ex. 23. 

126. Physical therapy and occupational therapy Progress Notes, and 

corresponding Check Lists, purport to reflect particular modalities administered to 

patients on particular days over a week. The Progress Notes also include patient 

assessments. Significantly, whether the forms reflect physical therapy or 

occupational therapy, they document predominately passive modalities and in most 

instances of physical therapy patients receiving hot and/or cold packs, electrical 

stimulation, ultrasound, therapeutic exercise and massage or manual therapy and in 

most instances of occupational therapy at least hot and/or cold packs, electrical 

stimulation, and ultrasound and also often therapeutic exercise and manual therapy. 

When the documents reflect exercises, in the majority of cases they do not 

document what exercises are purportedly performed. 

127. Assessments in the Progress Notes closely mirror those in the Plans of 

Treatment and Updated Plans. Like the assessments in the Plans, assessments in 

the Progress Notes purport to document that (a) patients often have tenderness at 

multiple levels ranging from level two to four on a scale of one to five in which 

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five is the most severe; (b) patients often have spasms ranging from level two to 

four on a scale of one to five in which five in the most severe; (c) patients have 

limitations in range of motion due to pain; and (d) patients have difficulty with a 

variety of tasks, including getting up from a low height chair, going up and down 

stairs, sleeping on their sides for a period time, lifting objects, sitting and watching 

television for a period of time, grooming and bathing and reaching. Despite the 

fact that the New Era and Pointe Progress Notes purport to document spasms and 

tenderness by scale, no generally accepted scale exists for spasms or tenderness. In 

2010, after the Treatment Facilities had employed an occupational therapist, the 

documents report headaches, often severe, with complaints of pain at between 

seven and ten on a scale of one to ten with ten being the most severe. 

128. The above-described patterns in the Plans of Treatment, Updated 

Plans, Progress Notes, and Check Lists are not credible as it is not possible that so 

many patients would suffer from identical conditions, require identical care, and 

not demonstrate a greater level of improvement over the course of treatment. 

129. Based on the treatment purportedly reflected in these records, the 

Treatment Facilities submit bills to State Farm for payment. These bills and the 

supporting documentation are part of a fraudulent scheme because: (a) the purpose 

for providing the same combination of treatments on almost every visit is because 

they are part and parcel of a Predetermined Protocol, not because they are 

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medically necessary for the patients; and (b) they represent that services were 

rendered when they were not. 

130. Since Michigan has no dollar limit on no-fault benefits, the pattern of 

re-diagnosis by the Prescribing Physicians and Prescribing Clinics and reevaluation by the Treatment Facilities, followed by a barrage of unnecessary and 

redundant treatment modalities, generally continues on indefinitely until: (a) the 

patient finally refuses further treatment; (b) an independent medical examination 

determines further treatment is not medically necessary; or (c) the patient resolves 

his claim. Defendants’ fraudulent referral cycle – diagnosis by Prescribing 

Physicians and Prescribing Clinics, fraudulent evaluation and treatment at the 

Treatment Facilities, and then back for another fraudulent diagnosis – typically 

lasts as long as the No-Fault benefits continue to flow. 

6. MRIs 

131. The ordering and performance of medically unnecessary MRIs is 

another component of Defendants’ scheme. The Prescribing Physicians and other 

physicians at the Prescribing Clinics wrote prescriptions for MRIs and sent patients 

to the MRI Facility owned and controlled by Gunabalan, namely Bio-Magnetic. 

132. Gunabalan and physicians acting under his direction at the Prescribing 

Clinics referred patients of the Prescribing Clinics to the MRI Facility in which 

Gunabalan has an ownership interest, namely Bio-Magnetic. In addition, 

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Gunabalan and the Prescribing Physicians and Clinics also sent patients to another 

MRI Facility that Gunabalan owns and/or controls, Michigan Biotech Partners 

LLC (“Michigan Biotech”). Michigan Biotech operates under an assumed name, 

The Imaging Center, though it submits bills under the name Michigan Biotech and 

from Bio-Magnetic’s address at 30781 Stephenson Highway, Madison Heights, 

Michigan. See Ex. 24. Michigan Biotech d/b/a The Imaging Center and BioMagnetic are part of a single group of MRI Facilities referenced on a common 

webpage and on reports of MRI results, with the webpage and National Plan and 

Provider Enumeration System identifying Gunabalan as President of the group. 

See Ex. 25. 

133. These MRIs were medically unnecessary and part of the protocol 

applied to patients of the Treatment Facilities. MRIs are advanced imaging 

procedures that should only be performed after an individualized determination is 

made on each patient that it is medically necessary. For example, MRIs may be 

ordered when a patient’s diagnostic picture is particularly unclear, response to 

treatment is atypical or not significant, and legitimate concerns about structural 

damage to the patient exist. When MRIs are ordered, they should be limited to the 

targeted body part or area of interest. It is thus uncommon to order MRIs on all 

regions of the spine or often more than one region. 

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134. When MRIs are clinically indicated and ordered by a physician, he or 

she should evaluate the significance of the MRI interpretations and incorporate 

those findings into ongoing or future treatment plans. Specifically, physicians 

must seek clinical corroboration as to whether any of the identified abnormalities 

in the MRI interpretations are preexisting and/or pose any clinical significance to 

the patient. For instance, it is well-established that many of the abnormalities 

identified in MRI reads have no clinical significance and result in no identified 

symptoms for the patient. In addition, many abnormalities in MRI radiological 

reports are related to patients’ normal aging process or are of a historical nature 

and have no correlation with any acute injury. As a result, it is important for the 

physicians treating a patient for an acute injury to differentially determine which, if 

any, abnormalities in MRI radiological reports are related to the presenting 

symptoms and/or any acute injury, and then to adjust the patient’s treatment 

accordingly. 

135. The above-described process of examination, diagnosis, and treatment 

must be documented for the benefit of: (a) the licensed professionals involved in 

the patient’s care; (b) other licensed professionals who may treat the patient 

contemporaneously or subsequently; (c) the patients themselves whose care and 

condition necessarily depends on the documentation of this information; and (d) 

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payors such as State Farm and other insurers who must pay for reasonable and 

necessary treatment. 

136. MRIs were ordered on patients of the Prescribing Physicians and 

Prescribing Clinics without clinical justification and nothing in initial examination 

reports or reports of follow up visits of patients contained documentation that 

justified them. Rather, in many instances, MRIs were ordered based on nothing 

more than patient complaints of pain. Patient charts do not reflect the taking of an 

adequate history or the performance of an adequate examination that might identify 

an objective basis to support the need for an MRI. 

137. Additionally, patients received multiple MRIs and, in many instances, 

MRIs were ordered and performed on multiple regions of the spine. See Ex. 27. 

138. MRI results also did not alter or affect patient treatment. Regardless 

of whether the results were normal or abnormal, therapy provided by the Treatment 

Facilities continued unaltered. 

139. Patients of the Treatment Facilities were sent to the MRI Facility 

from May 2009 until at least June 2011, and the Management Group played a role 

in steering patients to these facilities. As discussed above, Dr. Raoof testified that 

“Amanda” trained Dr. Raoof’s staff on how to refer patients not only for physical 

therapy but for MRIs. Dr. Raoof further stated, “Sharif Elsayed always used to tell 

me you have to build the case” which meant that after a certain number of office 

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“visit[s], then start ordering expensive tests” including MRIs. Dr. Milliner testified 

that when he ordered MRIs, El-Sayed sent all the patients to Bio-Magnetic. Dr. 

Schoolfield explained that El-Sayed patients were prescribed MRIs that El-Sayed 

was involved in providing. 

140. The referrals and performance of unnecessary MRIs are highly 

lucrative because the charges by Bio-Magnetic are exorbitant. Specifically, the 

MRI Facility regularly charged over $5,000 for MRIs performed on each spinal 

region. Thus, MRIs of multiple regions of the spine or parts of the body typically 

result in charges over $10,000. See Ex. 27. Such charges are not only enormous 

but are several times higher than hospitals in the same geographic areas charge for 

the same services. 

7. Injections 

141. In addition to the provision of unnecessary MRIs, patients who treated 

at the Treatment Facilities and received pain management injections received these 

injections through entities owned or affiliated with Gunabalan, namely Orthopedic 

Surgeons P.C. and Maple Millennium Medical Center, LLC. 

142. Thus, Gunabalan profited not only from the patients’ physical and 

occupational therapy at the Treatment Facilities and medical examinations 

performed at the Prescribing Clinics, but also from spinal injections performed at 

Orthopedic Surgeons and Maple Millennium. 

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H. Violations Of Michigan Self-Referral Law 

143. The Michigan Public Health Code prohibits self-referrals. 

Specifically, the Michigan Public Health Code incorporates and applies the Federal 

Stark Law and regulations prohibiting referrals by a physician for designated 

health services to any entity in which the physician has a financial relationship. 

See MCL § 333.16221(e)(iv)(B); see also MCL 333.16221(e)(iii) (prohibiting 

“[p]romotion for personal gain of an unnecessary drug, device, treatment, 

procedure, or service”); MCL 333.16221(h) (prohibiting “[a] violation, or aiding or 

abetting in a violation, of this article or of a rule promulgated under this article”). 

In Michigan, these prohibitions apply regardless of the source of payment for the 

health services. See MCL § 333.16221(e)(iv)(B). 

144. Designated health services include: (a) “[p]hysical therapy services”; 

(b) “[o]ccupational therapy services”; and (c) “radiology services, including 

magnetic resonance imaging.” 42 USC § 1395nn(h)(6). 

145. A “financial relationship” includes any ownership, investment, or 

compensation arrangement between the physician and the entity providing the 

designated health service. 42 USC § 1395nn(a)(2). An ownership or investment 

interest may be through equity, debt, or other means, and includes an interest in an 

entity that holds an ownership or investment interest in any entity providing the 

designated health service. Id. A compensation arrangement means any 

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arrangement involving any remuneration between a physician and an entity 

providing the designated health service. 42 USC § 1395nn(h)(1). 

146. A physician cannot circumvent the Stark law or the prohibitions in 

Michigan by having a physician under his or her control make a referral. Under 

the Stark law, “Referring physician means a physician who makes a referral as 

defined in this section or who directs another person or entity to make a referral or 

who controls referrals made by another person or entity. A referring physician and 

the professional corporation of which he or she is a sole owner are the same for 

purposes of this subpart.” 42 C.F.R. § 411.351. 

147. Thus, under Michigan and federal law, physicians may not refer 

patients for physical therapy, occupational therapy, or MRIs – or direct others to 

make physical therapy, occupational therapy, or MRI referrals – to facilities in 

which the physician has a financial relationship. The policy rationale behind these 

prohibitions on self-referrals is that medical treatment should be guided solely by 

the patient’s legitimate medical needs and physicians should not recommend 

services based on personal financial gain, rather than medical necessity. By 

prohibiting physicians from referring to facilities in which the physician has a 

direct or indirect financial interest, the Michigan Public Health Code and the 

Federal Stark law seek to reduce medically unnecessary services based on financial 

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motives as opposed to patient needs and eliminate financial factors that may 

interfere with a provider’s independent medical judgment. 

148. Physicians at the Prescribing Clinics violated Michigan’s prohibition 

on self-referrals when they referred patients (a) for physical and occupational 

therapy to Pointe and New Era; and (b) for MRIs to Bio-Magnetic. Accordingly, 

none of these services were “lawfully render[ed]” under the No-Fault Act. See 

M.C.L. § 500.3157 (only a “physician, hospital, clinic or other person or institution 

lawfully rendering treatment to an injured person” is entitled to payment). The 

bills and supporting documentation submitted by the Prescribing Clinics, 

Treatment Facilities, and Bio-Magnetic, were fraudulent for this reason as well. 

I. State Farm’s Justifiable Reliance 

149. Defendants are obligated legally and ethically to act honestly and with 

integrity. Yet, Defendants submitted, or caused to be submitted, bills, medical 

records and supporting documentation that are fraudulent in that they represent that 

the services were actually and lawfully rendered and were reimbursable, and were 

medically necessary when, in fact, they either were not performed or were 

performed pursuant to a Predetermined Protocol that was designed and carried out 

to enrich Defendants by maximizing their collection of the patients’ No-Fault 

Benefits, and in violation of Michigan’s prohibition on physician self-referrals. 

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150. State Farm is under statutory and contractual duties to pay No-Fault 

Benefits promptly for medically necessary services that are lawfully rendered. The 

bills and supporting documents that Defendants submitted, and caused to be 

submitted, to State Farm in support of the fraudulent charges at issue, combined 

with the material misrepresentations described above, were designed to and did 

cause State Farm to justifiably rely on them. 

151. As a result, State Farm has incurred damages of more than $775,000 

in benefits paid based upon the fraudulent charges. 

152. Based upon Defendants’ material misrepresentations and other 

affirmative acts to conceal their fraud from State Farm, State Farm did not discover 

and could not have reasonably discovered that its damages were attributable to 

fraud until shortly before it filed this Complaint. Indeed, State Farm did not 

discover and could not have reasonably discovered Defendants’ fraud scheme until 

it reviewed together hundreds of bills and supporting documentation submitted by 

Defendants to State Farm that, when considered together, revealed the 

Predetermined Protocol. 

III. JURISDICTION AND VENUE 

153. Pursuant to 28 U.S.C. § 1332(a)(1), this Court has jurisdiction over all 

claims because the matter in controversy exceeds the sum or value of $75,000, 

exclusive of interest and costs, and is between citizens of different states. 

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154. Pursuant to 28 U.S.C. § 1331, this Court has jurisdiction over the 

claims brought under 18 U.S.C. § 1961 et seq. (“RICO”) because they arise under 

the laws of the United States. 

155. This Court has jurisdiction over the state law claims because they are 

so related to the RICO claims as to form part of the same case and controversy. 

156. Pursuant to 28 U.S.C. § 1391(b), venue is proper in this district 

because a substantial part of the events or omissions giving rise to the claims 

occurred in this district. 

IV. THE PARTIES 

A. Plaintiff 

157. State Farm Mutual Automobile Insurance Company is a corporation 

incorporated under the laws of the State of Illinois, with its principal place of 

business in Bloomington, Illinois. It is licensed and engaged in the business of 

insurance in Michigan. 

B. Defendants 

1. Treatment Facility Defendants 

158. Defendant Pointe Physical Therapy, LLC is a Michigan Limited 

Liability Company with its principal place of business at 17200 East Ten Mile 

Road, Eastpointe, Michigan. From approximately 2009 through at least November 

2013, Pointe has knowingly submitted, and caused to be submitted, bills, medical 

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records, and supporting documentation as described, in part, in the chart attached 

hereto as Ex. 1 that are fraudulent in that they represent that the services were 

actually and lawfully rendered and were reimbursable, and were medically 

necessary when, in fact, they either were not performed or were performed 

pursuant to a Predetermined Protocol that was designed and carried out to enrich 

Defendants by maximizing their collection of the patients’ No-Fault Benefits, and 

in violation of Michigan’s prohibition on physician self-referrals 

159. Defendant New Era Physical Therapy, P.C. (“New Era I”) is a 

Michigan corporation with its principal place of business at G4007 West Court, 

Flint, Michigan. From approximately December 2007 through October 2009, New 

Era I knowingly submitted, and caused to be submitted, bills, medical records, and 

supporting documentation as described, in part, in the chart attached hereto as Ex. 

2 that are fraudulent in that they represent that the services were actually and 

lawfully rendered and were reimbursable, and were medically necessary when, in 

fact, they either were not performed or were performed pursuant to a 

Predetermined Protocol that was designed and carried out to enrich Defendants by 

maximizing their collection of the patients’ No-Fault Benefits, and in violation of 

Michigan’s prohibition on physician self-referrals. New Era I and New Era II are 

alter egos of one another because there is a unity of interest and ownership and/or 

they are organized and controlled so as to make New Era II a mere instrumentality 

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or agent of New Era I, such that the separate existence of New Era I and New Era 

II cease to exist. Moreover, the fraudulent conduct of New Era I and New Era II is 

such that adherence to the fiction of separate corporate existence would sanction a 

fraud or promote injustice. 

160. Defendant New Era PT Services Inc. (“New Era II”) is a Michigan 

corporation with its principal place of business at G4007 West Court G-2, Flint, 

Michigan. From approximately 2010 through at least October 2013, New Era II 

has knowingly submitted, and caused to be submitted, bills, medical records, and 

supporting documentation as described, in part, in the chart attached hereto as Ex. 

2 that are fraudulent in that they represent that the services were actually and 

lawfully rendered and were reimbursable, and were medically necessary when, in 

fact, they either were not performed or were performed pursuant to a 

Predetermined Protocol that was designed and carried out to enrich Defendants by 

maximizing their collection of the patients’ No-Fault Benefits, and in violation of 

Michigan’s prohibition on physician self-referrals. New Era I and New Era II are 

alter egos of one another because there is a unity of interest and ownership and/or 

they are organized and controlled so as to make New Era II a mere instrumentality 

or agent of New Era I, such that the separate existence of New Era I and New Era 

II cease to exist. Moreover, the fraudulent conduct of New Era I and New Era II is 

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such that adherence to the fiction of separate corporate existence would sanction a 

fraud or promote injustice. 

2. Prescribing Clinics 

161. Michigan Visiting Physicians, PC d/b/a Choice House Call (“Choice”) 

is a professional service corporation incorporated under the laws of the State of 

Michigan, with its principal place of business at 17200 East Ten Mile Road, 

Eastpointe, Michigan. As set forth, in part, in the charts attached hereto as Exs. 1 

and 2, many of the referrals for physical and occupational therapy performed 

through Pointe for which bills were submitted to State Farm came through Choice 

and physicians employed by and associated with Choice, including defendants 

Gunabalan, Quiroga and Ruden, and others, such as Dr. M. Shakeel Awaisi and Dr. 

Zakiya Autoine. 

162. Mundy Pain Clinic P.C. is a professional service corporation with its 

principal place of business at 6240 Rashelle Drive, Suite 103, Flint, Michigan. As 

set forth, in part, in the chart attached hereto as Ex. 2, many of the referrals for 

physical and occupational therapy performed through New Era for which bills 

were submitted to State Farm came through Mundy and physicians employed by 

and associated with Mundy, including defendants Hoban, Quiroga and Ruden, and 

others, such as Dr. M. Shakeel Awaisi. 

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163. Medical Evaluations P.C. is a professional service corporation with its 

principal place of business at 17117 West Nine Mile Road, Suite 1325, Southfield, 

Michigan and 21411 Civic Center, Suite 102, Southfield, Michigan. Medical 

Evaluations employed least six physicians, including defendants Beale and Ruden, 

as well as Dr. Irwin Lutwin, Dr. John Fow, Dr. Joel Milliner and Dr. Nazih 

Iskander, who similarly examined, diagnosed and prescribed physical and/or 

occupational therapy for patients who treated at Pointe. As set forth, in part, in the 

chart attached hereto as Ex. 1, many of the referrals for physical and occupational 

therapy performed at Pointe for which bills were submitted to State Farm came 

through Medical Evaluations. 

3. Management Group Defendants 

164. Defendant Ram Gunabalan resides in and is a citizen of Michigan. 

Gunabalan has been a licensed medical doctor in Michigan since 1973. At all 

relevant times, he owned and/or controlled the Treatment Facilities and Prescribing 

Clinics, and thus, directed their activities and the activities of those who were 

employed by and associated with them. In addition, Gunabalan owns BioMagnetic, the MRI Facility where many of the patients who purported to treat at 

the Prescribing Clinics and Treatment Facilities were sent for MRIs. Gunabalan 

also owns Michigan Biotech, another MRI facility which submits bills from BioMagnetic’s address and to which Gunabalan and the Prescribing Physicians and 

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Clinics also sent patients. Additionally, Gunabalan also has a financial interest in 

Orthopedic Surgeons P.C. and Maple Millennium Medical Center, LLC, which 

purported to provide spinal injections to patients who treated at the Prescribing 

Clinics and Treatment Facilities. See Ex. 26. 

165. Defendant Sherif El-Sayed resides in and is a citizen of Michigan. At 

all relevant times, he owned and/or controlled the Treatment Facilities and 

Prescribing Clinics, and thus, directed their activities and the activities of those 

who were employed by and associated with them. 

166. Defendant Amale Bazzi a/k/a Amanda Bazzi resides in and is a citizen 

of Michigan. At all relevant times, she owned and/or controlled the Treatment 

Facilities and Prescribing Clinics, and thus, directed their activities and the 

activities of those who were employed by and associated with them. 

 4. Prescribing Physician Defendants 

167. Defendant Martin Quiroga, D.O. resides in and is a citizen of 

Michigan. Quiroga has been a licensed medical doctor in Michigan since August 

2008. From approximately spring 2010 to summer 2011, Quiroga worked at 

Mundy. From approximately March 2010 to March 2011, Quiroga worked at 

Choice. Beginning as least as of March 2010, Quiroga began examining, 

diagnosing and prescribing medically unnecessary physical and occupational 

therapy for patients who treated at the Treatment Facilities. Quiroga prescribed 

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physical and/or occupational therapy for many of the patients who treated at the 

Treatment Facilities for whom bills were submitted to State Farm. See Exs. 1 

and 2. 

168. Defendant Andrew Ruden M.D. resides in and is a citizen of 

Michigan. Ruden has been a licensed medical doctor in Michigan since 1979. 

From approximately May 2009 to March 2011, Ruden worked at Mundy and 

Choice. In addition, Ruden worked at Medical Evaluations, P.C. for two months, 

in August and September 2009. Beginning as early as November 2010, Ruden 

began examining, diagnosing and prescribing medically unnecessary physical and 

occupational therapy for patients who treated at New Era. Ruden prescribed 

physical and/or occupational therapy for many of the patients who treated at New 

Era for whom bills were submitted to S20tate Farm. 

169. Defendant James Beale Jr., M.D. resides in and is a citizen of 

Michigan. Beale has been a licensed medical doctor in Michigan since 1975. 

Beale is the paper owner of and performs examinations at Medical Evaluations. 

Beginning as early as April 2009, Beale began examining, diagnosing and 

prescribing medically unnecessary physical and occupational therapy for patients 

who treated at Pointe. Beale prescribed physical and/or occupational therapy for 

many of the patients who treated at Pointe for whom bills were submitted to 

State Farm. 

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170. Defendant Sean J. Hoban, M.D., resides in and is a citizen of 

Michigan. Hoban has been a licensed medical doctor in Michigan since 1967. 

From late 2007 through early 2011, Hoban worked at IMA. In approximately 

March 2011, Hoban started working at Mundy. Beginning as early as January 

2008, Hoban began examining, diagnosing and prescribing medically unnecessary 

physical and occupational therapy for patients who treated at New Era. Hoban 

prescribed physical and/or occupational therapy for many of the patients who 

treated at New Era for whom bills were submitted to State Farm. 

 5. The MRI Facility 

171. Bio-Magnetic Resonance, Inc. (“Bio-Magnetic”) is a Michigan 

corporation with its principal place of business at 30781 Stevenson Highway, 

Madison Heights, Michigan. From approximately late 2009 until at least June 

2011, Bio-Magnetic submitted, and caused to be submitted, bills and supporting 

documentation, described in the chart attached to the complaint as Ex. 27 for MRI 

tests. These submissions were fraudulent in that they represented that the services 

were actually rendered and were medically necessary when, in fact, the services 

were not necessary or were performed pursuant to a protocol that was designed and 

carried out to enrich Defendants by maximizing collection of the patients’ NoFault Benefits, and not to benefit the patients. Bio-Magnetic was owned and/or 

controlled by Gunabalan who is identified as Bio-Magnetic’s President and 

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Registered Agent in corporate filings with the State of Michigan, and as its 

President on Bio-Magnetic’s webpage. See Ex. 25. 

V. CAUSES OF ACTION 

FIRST CLAIM FOR RELIEF 

COMMON LAW FRAUD 

(Against All Defendants) 

172. State Farm incorporates, adopts and re-alleges as though fully set 

forth herein, each and every allegation in Paragraphs 1 through 171 above. 

173. Defendants intentionally and knowingly made false and fraudulent 

statements of material fact to State Farm by submitting, and causing to be 

submitted, hundreds of fraudulent bills and related documentation that contained 

false representations of material fact. 

174. The false representations of material fact include that (a) the 

Prescribing Physicians and physicians employed by and associated with the 

Prescribing Clinics legitimately examined and prescribed physical therapy and 

occupational therapy that was medically necessary and tailored to the unique needs 

of each patient, when in fact they did not do so; (b) the Prescribing Physicians and 

physicians employed by and associated with the Prescribing Clinics legitimately 

determined that patients were disabled; (c) the Treatment Facilities provided 

treatments that were medically necessary and tailored to the unique needs of each 

patient, when in fact they were not, if they were provided at all; (d) both physical 

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therapy and occupational therapy services were necessary and performed when in 

fact they were not; (e) MRI tests were ordered that were medically necessary and 

tailored to the unique needs of each patient, when in fact they were not; and (f) the 

services were lawfully rendered and were remibursable, when in fact they violated 

Michigan’s prohibition on self-referrals. The fraudulent bills and dates of first 

mailings are described in Exs. 1, 2 and 27. Representative samples of these bills 

and supporting documentation are attached as Exs. 13, 28 and 29. 

175. Defendants knew that the above-described misrepresentations made to 

State Farm relating to the purported examination, evaluation, diagnoses, and 

treatment of patients were false and fraudulent when they were made. 

176. Defendants made the above-described misrepresentations and engaged 

in such conduct to induce State Farm into relying on the misrepresentations. 

177. As a result of its justifiable reliance on these misrepresentations, State 

Farm has incurred damages of at least $775,000. 

178. The willful, reckless, and/or wanton conduct of Defendants entitles 

State Farm to punitive damages. 

WHEREFORE, State Farm demands judgment against Pointe, New Era I, 

New Era II, Choice, Mundy, Medical Evaluations, Gunabalan, Quiroga, Ruden, 

Beale, Hoban, El-Sayed, Bazzi, and Bio-Magnetic for compensatory damages, 

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punitive damages, costs, and other such relief as this Court deems equitable, just 

and proper. 

SECOND CLAIM FOR RELIEF 

VIOLATION OF 18 U.S.C. § 1962(c) 

(Against All Defendants) 

179. State Farm incorporates, adopts and re-alleges as though fully set 

forth herein, each and every allegation in Paragraphs 1 through 171 above. 

180. Pointe, New Era I, New Era II, Choice, Mundy, Medical Evaluations, 

Gunabalan, Quiroga, Ruden, Beale, Hoban, El-Sayed, Bazzi, and Bio-Magnetic 

formed an association-in-fact “enterprise” (the “Treatment Enterprise”) as that 

term is defined in 18 U.S.C. § 1961(4), that engages in, and the activities of which 

affect, interstate commerce. 

181. The members of the Treatment Enterprise are and have been joined in 

a common purpose, have relationships with and among each other, and have 

associated through time sufficient to permit those associated to pursue the 

enterprise’s purpose. Pointe, New Era I, New Era II, Choice, Mundy, Medical 

Evaluations, Gunabalan, Quiroga, Ruden, Beale, Hoban, El-Sayed, Bazzi, and BioMagnetic forged symbiotic relationships and needed and depended upon the 

participation of the others to accomplish their common purpose of defrauding State 

Farm through fraudulent personal injury claims. Specifically, the Treatment 

Facilities, Pointe, New Era I and New Era II, profited by billing State Farm for the 

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physical therapy and occupational therapy but depend on prescriptions issued by 

the Prescribing Clinics and the Prescribing Physicians. The Prescribing Clinics 

and Prescribing Physicians profit by fraudulently billing State Farm directly for 

each instance in which they purportedly examine patients who they treat and 

benefit when the Treatment Facilities refer the patients back to them for continuing 

treatment and re-diagnosis. The Management Group participates in each of these 

activities, own and/or control the Treatment Facilities and the Prescribing Clinics, 

profit from the treatment provided at the Treatment Facilities and the Prescribing 

Clinics, and funnel patients into treatment at the Treatment Facilities. 

Additionally, Gunabalan himself purports to treat patients, prescribe therapy and 

other medical services. The MRI Facility profited by billing State Farm for 

medically unnecessary MRI tests performed on patients of the Treatment Facilities 

and depend on prescriptions issued by the Prescribing Clinics and the Prescribing 

Physicians. The participation and role of each of the Defendants was necessary to 

the success of the scheme. Neither Pointe, New Era I, New Era II, Choice, Mundy, 

Medical Evaluations, Gunabalan, Quiroga, Ruden, Beale, Hoban, El-Sayed, Bazzi, 

nor Bio-Magnetic was capable of carrying out the scheme without the participation 

of the others. 

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182. Pointe, New Era I, New Era II, Choice, Mundy, Medical Evaluations, 

Gunabalan, Quiroga, Ruden, Beale, Hoban, El-Sayed, Bazzi, and Bio-Magnetic are 

or have been employed by and associated with the Treatment Enterprise. 

183. Pointe, New Era I, New Era II, Choice, Mundy, Medical Evaluations, 

Gunabalan, Quiroga, Ruden, Beale, Hoban, El-Sayed, Bazzi, and Bio-Magnetic 

have knowingly conducted and/or participated, directly or indirectly, in the 

conduct of the Treatment Enterprise’s affairs through a pattern of racketeering 

activity consisting of repeated violations of the federal mail fraud statute, 18 

U.S.C. § 1341, based upon the use of United States mails to submit to State Farm 

hundreds of fraudulent claims, consisting of bills and supporting documentation 

that were fraudulent in that they were for examinations, diagnoses, MRIs, and 

treatments, which were not performed, were performed pursuant to a 

Predetermined Protocol that was designed and carried out to enrich Defendants by 

maximizing collection of the patients’ No-Fault Benefits, and not to benefit the 

patients. The false representations of material fact include that (a) the Prescribing 

Physicians and physicians employed by and associated with the Prescribing Clinics 

legitimately examined and prescribed physical therapy and occupational therapy 

that was medically necessary and tailored to the unique needs of each patient, 

when in fact they did not do so; (b) the Prescribing Physicians and physicians 

employed by and associated with the Prescribing Clinics legitimately determined 

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that patients were disabled; (c) the Treatment Facilities provided treatments that 

were medically necessary and tailored to the unique needs of each patient, when in 

fact they were not, if they were provided at all; (d) both physical therapy and 

occupational therapy services were necessary and performed when in fact they 

were not; (e) MRI tests were ordered that were medically necessary and tailored to 

the unique needs of each patient, when in fact they were not; and (f) the services 

were lawfully rendered and were reimbursable, when in fact they violated 

Michigan’s prohibition on self-referrals. 

184. The fraudulent bills and corresponding mailings which comprise the 

pattern of racketeering activity identified through the date of this Complaint are 

described, in part, in Exs. 1, 2 and 27. Representative samples of these bills and 

supporting documentation are attached as Exs. 13, 28 and 29. 

185. State Farm has been injured in its business and property by reason of 

the above-described conduct in that it has paid more than $775,000 based upon the 

fraudulent charges. 

WHEREFORE, State Farm demands judgment against Pointe, New Era I, 

New Era II, Choice, Mundy, Medical Evaluations, Gunabalan, Quiroga, Ruden, 

Beale, Hoban, El-Sayed, Bazzi, and Bio-Magnetic for compensatory damages, 

together with treble damages, costs and reasonable attorneys’ fees pursuant to 18 

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U.S.C. § 1964(d), plus interest, and any other relief the Court deems just and 

proper. 

THIRD CLAIM FOR RELIEF 

VIOLATION OF 18 U.S.C. § 1962(d) 

(Against All Defendants) 

186. State Farm incorporates, adopts and re-alleges as though fully set 

forth herein, each and every allegation in Paragraphs 1 through 171 and 179 

through 185 above. 

187. Pointe, New Era I, New Era II, Choice, Mundy, Medical Evaluations, 

Gunabalan, Quiroga, Ruden, Beale, Hoban, El-Sayed, Bazzi, and Bio-Magnetic 

have knowingly agreed and conspired to conduct and/or participate, directly or 

indirectly, in the conduct of the Treatment Enterprise’s affairs through a pattern of 

racketeering activity consisting of repeated violations of the federal mail fraud 

statute, 18 U.S.C. § 1341, based upon the use of the United States mails to submit 

to State Farm claims, consisting of bills and supporting documentation that were 

fraudulent in that they were for examinations, diagnoses, MRIs, and treatments, 

which were not performed or were performed pursuant to a Predetermined Protocol 

that was designed and carried out to enrich Defendants by maximizing collection 

of the patients’ No-Fault Benefits, and not to benefit the patients. 

188. The fraudulent bills and corresponding mailings which comprise the 

pattern of racketeering activity identified through the date of this Complaint are 

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described, in part, in Exs. 1, 2 and 27, attached hereto. Representative samples of 

these bills and supporting documentation are attached as Exs. 13, 28, and 29. 

189. Pointe, New Era I, New Era II, Choice, Mundy, Medical Evaluations, 

Gunabalan, Quiroga, Ruden, Beale, Hoban, El-Sayed, Bazzi, and Bio-Magnetic 

agreed to and acted in furtherance of the common and overall objective of the 

conspiracy by facilitating the submission to State Farm of bills and related 

documentation for examinations, diagnoses, and treatments, which were not 

performed, were performed pursuant to a Predetermined Protocol, were medically 

unnecessary, and/or were unlawfully rendered in violation of Michigan’s 

prohibition on physician self-referrals. 

190. State Farm has been injured in its business and property by reason of 

the above-described conduct in that it has paid more than $775,000 based upon the 

fraudulent charges. 

WHEREFORE, State Farm demands judgment against Pointe, New Era I, 

New Era II, Choice, Mundy, Medical Evaluations, Gunabalan, Quiroga, Ruden, 

Beale, Hoban, El-Sayed, Bazzi, and Bio-Magnetic for compensatory damages, 

together with treble damages, costs and reasonable attorneys’ fees pursuant to 18 

U.S.C. §1964(d), plus interest, and any other relief the Court deems just and 

proper. 

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FOURTH CLAIM FOR RELIEF 

UNJUST ENRICHMENT 

(Against the All Defendants) 

191. State Farm incorporates, adopts and re-alleges as though fully set 

forth herein, each and every allegation in Paragraphs 1 through 171 above. 

192. State Farm conferred a benefit upon Pointe, New Era I, New Era II, 

Choice, Mundy, Medical Evaluations, Gunabalan, Quiroga, Ruden, Beale, Hoban, 

El-Sayed, Bazzi, and Bio-Magnetic by paying their claims and these Defendants 

voluntarily accepted and retained the benefit of those payments. 

193. Because Pointe, New Era I, New Era II, Choice, Mundy, Medical 

Evaluations, Gunabalan, Quiroga, Ruden, Beale, Hoban, El-Sayed, Bazzi, and BioMagnetic knowingly submitted, and caused to be submitted, fraudulent bills and 

related documentation for examinations, diagnoses, and treatments, the 

circumstances are such that it would be inequitable to allow them to retain the 

benefit of the monies paid. 

194. As a direct and proximate result of the above-described conduct, State 

Farm has been damaged and Pointe, New Era I, New Era II, Choice, Mundy, 

Medical Evaluations, Gunabalan, Quiroga, Ruden, Beale, Hoban, El-Sayed, Bazzi, 

and Bio-Magnetic have been unjustly enriched by more than $775,000. 

WHEREFORE, State Farm demands judgment against Pointe, New Era I, 

New Era II, Choice, Mundy, Medical Evaluations, Gunabalan, Quiroga, Ruden, 

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91 

Beale, Hoban, El-Sayed, Bazzi, and Bio-Magnetic for compensatory damages plus 

interest and costs and for such other relief as the Court deems equitable, just and 

proper. 

FIFTH CLAIM FOR RELIEF 

DECLARATORY JUDGMENT 

(Against Pointe Physical Therapy) 

195. State Farm incorporates, adopts and re-alleges as though fully set 

forth herein, each and every allegation in Paragraphs 1 through 171 above. 

196. This is an action for declaratory relief pursuant to 28 U.S.C. § 2201. 

197. There is an actual case and controversy between State Farm, on the 

one hand, and Pointe Physical Therapy, on the other hand as to all charges for 

examinations, diagnoses, and treatments that have not been paid. State Farm 

contends that Pointe Physical Therapy is not entitled to reimbursement for any of 

these charges. 

198. Because Pointe Physical Therapy and its owners have made false and 

fraudulent statements and otherwise engaged in the above-described fraudulent 

conduct with the intent to conceal and misrepresent material facts and 

circumstances regarding each claim submitted to State Farm, Pointe Physical 

Therapy is not entitled to reimbursement for any of the claims at issue. 

WHEREFORE, State Farm respectfully requests a judgment declaring that 

Pointe Physical Therapy is not entitled to reimbursement for any of the unpaid 

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charges for the examinations, diagnoses, and treatments, and for supplementary 

relief, attorneys’ fees, interest and costs as this Court deems equitable, just and 

proper. 

SIXTH CLAIM FOR RELIEF 

DECLARATORY JUDGMENT 

(Against New Era Physical Therapy, P.C.) 

199. State Farm incorporates, adopts and re-alleges as though fully set 

forth herein, each and every allegation in Paragraphs 1 through 171 above. 

200. This is an action for declaratory relief pursuant to 28 U.S.C. § 2201. 

201. There is an actual case and controversy between State Farm, on the 

one hand, and New Era Physical Therapy, P.C. (“New Era I”), on the other hand as 

to all charges for examinations, diagnoses, and treatments that have not been paid. 

State Farm contends that New Era I is not entitled to reimbursement for any of 

these charges. 

202. Because New Era I and its owners have made false and fraudulent 

statements and otherwise engaged in the above-described fraudulent conduct with 

the intent to conceal and misrepresent material facts and circumstances regarding 

each claim submitted to State Farm, New Era I is not entitled to reimbursement for 

any of the claims at issue. 

WHEREFORE, State Farm respectfully requests a judgment declaring that 

New Era I is not entitled to reimbursement for any of the unpaid charges for the 

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93 

examinations, diagnoses, and treatments, and for supplementary relief, attorneys’ 

fees, interest and costs as this Court deems equitable, just and proper. 

SEVENTH CLAIM FOR RELIEF 

DECLARATORY JUDGMENT 

(Against New Era PT Services, Inc.) 

203. State Farm incorporates, adopts and re-alleges as though fully set 

forth herein, each and every allegation in Paragraphs 1 through 171 above. 

204. This is an action for declaratory relief pursuant to 28 U.S.C. § 2201. 

205. There is an actual case and controversy between State Farm, on the 

one hand, and New Era PT Services, Inc. (“New Era II”), on the other hand as to 

all charges for examinations, diagnoses, and treatments that have not been paid. 

State Farm contends that New Era II is not entitled to reimbursement for any of 

these charges. 

206. Because New Era II and its owners have made false and fraudulent 

statements and otherwise engaged in the above-described fraudulent conduct with 

the intent to conceal and misrepresent material facts and circumstances regarding 

each claim submitted to State Farm, New Era II is not entitled to reimbursement 

for any of the claims at issue. 

WHEREFORE, State Farm respectfully requests a judgment declaring that 

New Era II is not entitled to reimbursement for any of the unpaid charges for the 

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examinations, diagnoses, and treatments, and for supplementary relief, attorneys’ 

fees, interest and costs as this Court deems equitable, just and proper. 

EIGHTH CLAIM FOR RELIEF 

DECLARATORY JUDGMENT 

(Against Bio-Magnetic Resonance, Inc.) 

207. State Farm incorporates, adopts and re-alleges as though fully set 

forth herein, each and every allegation in Paragraphs 1 through 171 above. 

208. This is an action for declaratory relief pursuant to 28 U.S.C. § 2201. 

209. There is an actual case and controversy between State Farm, on the 

one hand, and Bio-Magnetic Resonance, Inc. (“Bio-Magnetic”), on the other hand 

as to all charges for examinations, diagnoses, and treatments that have not been 

paid. State Farm contends that Bio-Magnetic is not entitled to reimbursement for 

any of these charges. 

210. Because Bio-Magnetic and its owners have made false and fraudulent 

statements and otherwise engaged in the above-described fraudulent conduct with 

the intent to conceal and misrepresent material facts and circumstances regarding 

each claim submitted to State Farm, Bio-Magnetic is not entitled to reimbursement 

for any of the claims at issue. 

WHEREFORE, State Farm respectfully requests a judgment declaring that 

Bio-Magnetic is not entitled to reimbursement for any of the unpaid charges for the 

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95 

examinations, diagnoses, and treatments, and for supplementary relief, attorneys’ 

fees, interest and costs as this Court deems equitable, just and proper. 

JURY DEMAND 

Pursuant to Federal Rule of Civil Procedure 38(b), State Farm demands a 

trial by jury. 

Dated: April 29, 2014 

By: s/Thomas W. Cranmer 

Thomas W. Cranmer (P25252) 

Matthew P. Allen (P57914) 

Miller, Canfield P.L.C. 

840 W. Long Lake Road, Suite 200 

Troy, Michigan 48098 

(248)-267-3381 

cranmer@millercanfield.com 

allen@millercanfield.com 

Ross O. Silverman (IL 6226560) 

Jonathan L. Marks (IL 6201572) 

Kathy P. Josephson (IL 6278242) 

Kathleen A. Kelley (IL 6288296) (E.D. 

Mich. admission pending) 

Katten Muchin Rosenman LLP 

525 West Monroe Street 

Chicago, IL 60661-3693 

(312) 902-5200 

ross.silverman@kattenlaw.com 

jonathan.marks@kattenlaw.com 

kathy.josephson@kattenlaw.com 

kathleen.kelley@kattenlaw.com 

Attorneys for Plaintiff State Farm 

Mutual Automobile Insurance Company 

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