UNITED STATES DISTRICT COURT

IN THE EASTERN DISTRICT OF MICHIGAN

CLIFTON E. JACKSON and 

CHRISTOPHER M. SCHARNITZKE,

Plaintiffs, on behalf of themselves and Case No.: 2009-11529

 other persons similarly situated Judge David M. Lawson

SEGWICK CLAIMS MANAGEMENT 

SERVICES, INC, and 

COCA COLA ENTERPRISES, INC, 

foreign corporations, and 

DR. PAUL DROUILLARD, 

Jointly and Severally, 

Defendants.

_________________________________________/

Marshall Lasser P25573 

MARSHALL LASSER PC

Attorney for plaintiffs

po box 2579 

Southfield MI 48037

248-647-7722

_________________________________________/

RICO CASE STATEMENT

1. Violation of 18 U.S.C. 1962 (a, b and c).

2. The named plaintiffs and the class members are employees of Coca Cola (Coke).

Sedgwick Claims Management Services (Sedgwick) with Coke adjusted the workers

compensation claims of the plaintiffs and class members who were injured working for Coke. 

Coke and Sedgwick defrauded plaintiffs and class members of their workers compensation

benefits by fraudulently denying those benefits or fraudulently cutting off those benefits. They

did so by, inter alia, by denying or cutting off benefits for reasons known to be false, and or by

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retaining a doctor, such as Paul Drouillard to conduct a so-called “independent medical

examination” (IME) which they knew would not be independent but would be highly or

completely biased toward finding no work-related disability. That is, they knew Dr. Drouillard

was a “cut off” doctor, a physician known to Michigan workers compensation attorneys and

claims adjusters as a doctor who would examine a claimant and always or nearly always find no

work-related disability, despite the claimants’ treating surgeons finding of work-related disbility.

 Coke and Sedgwick knew the report of these cut off doctors could be cited as grounds for cutting

off or denying from the start a claimant’s workers compensation benefits. 

Coke and Sedgwick deliberately violated their duties under the Michigan Workers

Disability Compensation Act, MCL 481.101 et seq, to be honest in the administration of a

workers compensation claim, and not to “unreasonably fail to pay promptly claims for

compensation for which it shall become liable.” This duty required defendants to weigh in good

faith the report of a doctor they hired to examine a claimant against the reports and records of a

claimant’s treating doctors, and all other medical records, where the treating doctor found a

work-related disability. Defendants used the mails and wires in furtherance of this scheme, in

violation of 18 U.S.C. 1341 and 1343. Coke, Sedgwick and other defendants fraudulently

violated duties owed plaintiff under the Michigan Uniform Trade Practices Act (MUTPA), using

the mails and wires in furtherance of their scheme. The duties imposed on defendants in the

administration of workers compensation claims by the provision of that act required defendants

to weigh in good faith the report of a doctor they hired to examine a claimant against the reports

and records of a claimant’s treating doctors, and all other medical records, where the treating

doctor found a work-related disability. However, Sedgwick and Coke did not conduct this good

faith examination; upon receipt of a report from a cut off doctor they cut off benefits. 

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Coke and Sedgwick also filed with the Michigan Workers Compensation Agency Notices

of Dispute containing fraudulent grounds for denying or terminating benefits (the Michigan

Workers Disability Compensation Act required an insurer or self insurer or claims adjusting

company to file a Notice of Dispute when denying or terminating benefits.) 

Coke and Sedgwick were assisted in selection of IME physicians and in the

administration of Michigan workers compensation claims by their Michigan defense counsel,

who knew that Dr. Drouillard and other IME doctors, such as Phillip Mayer, were “cut off”

doctors. These attorneys have not been named as defendants but on information and belief they

assisted Coke and Sedgwick in identifying and recommending for defendants cut off doctors such

as Drouillard and Mayer, who they used in many other cases for many other clients, and whom

they knew would write cut off reports.

Dr. Drouillard is a cut off doctor par excellence. He earns $600,000 or more per year

doing IMEs. He always or nearly always finds no work-related disability. He finds no workrelated disability far more often than any other IME doctor hired by the insurance companies.

He finds no work-related disability far, far, far more often than a claimant’s treating surgeon

(who don’t do IMEs for insurers).

In Michigan, there are scores of IME doctors regularly used by workers compensation

insurers and claims adjusters; some, perhaps a dozen, are corrupt in that they lie in their reports

and find no work-related disability at a rate much, much higher than that found by treating

doctors or even by their fellow IME doctors. (An IME doctor who finds work-related disability

too often is no longer hired by insurers and claims adjusters.)

 Dr. Drouillard finds no work-related disability at a rate much higher than even his IME

brethren. On information and belief, he finds no work-related in 98% of his examinations,

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whereas treating physicians find disability in 100% of claimants (by definition; claimants are

people who have been cut off or denied workers compensation, but do have a work-related

disability according to their treating doctors). Other IME doctors find disability or work-related

disability in 30-50% of claimants. 

More to the point, plaintiffs will prove Dr. Drouillard lies. He lies in his reports. He lies

about the examination he claims to conduct (many examinees insist he did not perform the exam

his reports say he performed). He lies about what the examinee allegedly did or said during the

exam (he often reports that an examinee did not disclose a prior injury, when the examinee insists

he did tell the doctor about the prior injury). He lies in the bottom line of the IME - the opinion

as to whether there is a work-related disability - when he finds no work-related disability. 

3. On information and belief, discovery will reveal that Michigan workers compensation

defense counsel assisted their clients, Coke and Sedgwick, in identifying and recommending for

their clients cut off doctors such as Drouillard and Mayer. These attorneys recommended or

hired Drouillard and Mayer in many other cases for other clients, for many years; they knew

Drouillard and Mayer and other doctors would write cut off reports. They knew Drouillard and

Mayer were dishonest, or so biased toward finding no work-related disability that their clients

could not fulfill their duties under Michigan law to fairly, honestly, and in good faith decide the

claims of Coke employees. 

4. Jackson and Scharnitzke were injured by fraudulent denial of their workers

compensation benefits. Jackson injured his low back; he was treated by Dr. Shlomo Mandel, a

back specialist (who, curiously, does hundreds of IMEs each year for workers compensation

insurance companies, but in this case he was Jackson’s treater). Dr. Mandel told Segdwick Mr.

Jackson had a work-related disability. Sedgwick sent Jackson for an IME with Drouillard who

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wrote a cut off report; Sedgwick and Coke cut off benefits. The injury is the loss of benefits and

the expense and time of recovering those benefits. 

Scharnitzke was fraudulently denied benefits. Sedgwick and Coke denied benefits

initially without grounds for doing so, and later, when they received medical reports from

plaintiff’s orthopedic surgeon informing them plaintiff had a work related disability, they

persisted in their denial of benefits. The injury is the loss of benefits and the expense and time

of recovering those benefits. 

5. a-b. Alleged predicate acts and statutes allegedly violated; dates of predicate acts.

Cliffton Jackson. On Jan. 6, 2009, LaTara Lewis, Sedgwick claim adjuster, mailed

plaintiff a letter stating, “I have scheduled an Independent Medical Evaluation for you with Dr.

Drouillard on Jan. 14, 2009....” The letter was fraudulent for reasons stated in the complaint, and

even if an innocent mailing it was used in furtherance of the scheme of fraudulently cutting off

plaintiff’s benefits. 

Dr. Drouillard mailed wrote a report of his examination dated Jan. 14, 2009 to Sedgwick,

and Sedgwick mailed or emailed a copy to plaintiff. The report contained lies, as described in

the complaint.

Sedgwick mailed a Notice of Dispute to the Agency and to plaintiff on 1/22/09 which

falsely stated “Per IME report of Dr. Drouillard, Mr. Jackson can return to full duty and has

reached MMI [maximum medical improvement] status.” This Notice of Dispute was false and

was used in furtherance of the fraudulent scheme. These two predicate acts of mail fraud (third

and fourth involving Jackson) are not alleged in the complaint; plaintiff will seek to amend the

complaint to allege them. 

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On information and belief, discovery will reveal other mailings and electronic

communications among defendants and their attorneys which are predicate acts.. These

communications are not in the possession of plaintiffs. 

These mailings were predicate acts of mail fraud, in violation of 18 U.S.C. 1341 and

1343. (Under case law, an innocent mailing is mail fraud if used in furtherance of a fraudulent

scheme.) 

In addition to the mail and wire fraud statutes violated, defendants violated 18 U.S.C.

1962(a, b and c), as described in para. 16, 17, 19 and 24-26 of the complaint.

Chris Scharnitzke. Sedgwick mailed to the Agency and to plaintiff on March 18, 2008

a Notice of Dispute stating “medical treatment not related to injury.....” This Notice was false

and used in furtherance of the fraudulent scheme. These are two predicate acts (mailing to the

Agency and mailing to plaintiff). 

On or about July 22, 2008, Coke and Sedgwick mailed to the Agency and to plaintiff or

his counsel a Carrier’s Response, which denied that plaintiff was disabled; that denial was false,

in that defendants possessed information that plaintiff was disabled, and no information that

plaintiff was not disabled. The Response also denied that the disability was work related, and

that denial was false, in that defendants had sufficient proof from plaintiff’s medical records of

a work related disability, and no proof the disability was not work related. These are two

additional predicate acts (mailing to Agency and to plaintiff.)

Thus plaintiff has alleged two predicate acts involving Jackson, and will amend to allege

acts three and four; he has alleged four predicate acts involving Scharnitzke.

On information and belief, discovery will reveal other mailings and electronic

communications among defendants and their attorneys which are predicate acts.. These

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communications are not in the possession of plaintiffs. 

These mailings were predicate acts of mail fraud, in violation of 18 U.S.C. 1341 and

1343. (Under case law, an innocent mailing is mail fraud if used in furtherance of a fraudulent

scheme.) By means of the mail and wire fraud, defendants violated 18 U.S.C. 1962(a, b and c),

as described in para. 16, 17, 19 and 24-26 of the complaint.

5 d. No criminal conviction.

5 e. No judgments.

5 f and g. Pattern and Plan: Sedgwick and Coke regularly and continuously dishonestly

cut off or terminate workers compensation benefits to Michigan injured workers employed by

Coke. On information and belief, Sedgwick has also regularly and continuously dishonestly cut

off or terminated benefits for Michigan injured workers employed by DHL Holdings and other

companies whose claims Sedgwick adjusts; for example, Sedgwick uses the same cut off doctors

and files false Notices of Dispute in these other Michigan workers compensation cases. 

Sedgwick and Coke cut off or terminate benefits in violation of their duties under

Michigan law, as set forth in the complaint. They cut off and deny for false reasons, they use cut

off doctors such as Paul Drouillard, they do not honestly and fairly weigh the report of IME

doctors such as Drouillard against information received from treating doctors but upon receipt

of the IME report they cut off benefits. They file fraudulent Notices of Dispute. Dr. Drouillard

lies in his reports. He lies not only for Sedgwick and Coke, but in many cases each year

involving employers such as UPS and Ajax Paving. This is a pattern of behavior which has

existed for years and will continue into the future unless stopped, and on information and belief

has hurt dozens of Coke workers.

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6. The enterprise. The definition of enterprise is changing; an important case is before

the USSC and will be decided this term. Therefore, plaintiffs have described alternative

enterprises. 

(1) The workers compensation personnel at the workers compensation claims

departments at Sedgwick and Coke, handling Michigan workers compensation claims and

associating in fact, formed an “enterprise” for purposes of the Racketeer Influenced and Corrupt

Organizations Act (RICO) claims in this case. Because they worked together regularly in

adjusting and handling workers compensation claims for Coke Michigan workers, they formed

an organization. The personnel at Sedgwick who handled Coke’s Michigan workers

compensation claims, and the Michigan defense attorneys who worked with Sedgwick on those

claims, also handled Michigan workers compensation claims for other employers, such as DHL

Holdings. The names of other persons in the enterprise are not known to plaintiffs. Additionally

or alternatively, the following persons or entities are an “enterprise” which acted to defraud

plaintiffs of their workers compensation benefits: 

(2) the workers compensation claims personnel at Sedgwick who handled Michigan

claims; 

(3) the workers compensation claims personnel at Sedgwick who handled Michigan

claims, plus Dr. Drouillard; 

(4) the workers compensation claim personnel at Coke and Sedgwick handling Michigan

claims, plus Dr. Paul Drouillard;

(5) the workers compensation defense attorneys may be and may have been part of the

enterprise.

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7. Separate.

8. The daily activities of the enterprise (Sedgiwck and Coke workers compensatsion

departments) includes adjustment and administration of workers compensation claims. Some and

perhaps the majority of those claims are paid properly. But a significant percentage of the

claims are fraudulently denied or cut off. 

9. The enterprise profits if a claimant is forced by poverty to settle his claim for less

than it is worth - this happens all the time; it profits if a workers compensation magistrate accepts

the testimony of Dr. Drouillard and denies benefits; it profits from holding and investing the

money during the months and years between the cut off or denial of a claim and the date the

claim is paid. 

10. Coke and Sedgwick move money and (for Coke) product interstate.

11. Coke and Sedgwick used the money derived from the scheme to fund their businesses

and to invest.

12. Coke and Sedgwick control the enterprise.

13. Workers compensation claim adjusters employed by defendant, and Dr. Drouillard,

work for the enterprise. The liable persons are defendants.

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14. NA

15. Plaintiffs have to pay an attorney fee and expenses to recover their benefits (both

weekly wage loss benefits and medical coverage for their work-related injury). Plaintiffs lost the

time value of the money which they received years after they should have received it.

16 and 17. By fraudulently cutting off or denying workers compensation benefits,

defendants took money out of plaintiff’s pockets - their weekly benefits. Defendants deprived

plaintiffs of medical treatment for their work-related injuries.

17. The amount of the damages cannot be ascertained at this time, because plaintiffs

remain disabled and wrongfully denied benefits continue to accrue.

18. NA

19. NONE

20. The undersigned attorney has filed three civil RICO cases alleging fraudulent cut off

or denial of workers compensation by Michigan insurers and claims administrators, fraudulent

testimony by doctors who regularly do “independent medical examinations” for those insurers

and administrators. In the first case, Brown et al v Cassens et al, ____ F 3d ____ (6th Cir 2008,

case no 05-2089, decision of 10/23/08), the Sixth Circuit recognized this cause of action. The

present case is one of those three cases; in two of the cases, Dr. Paul Drouillard is a defendant.

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The undersigned attorney plans to file soon a fourth RICO case involving similar allegations,

against DHL Holdings, Inc and - once again - Dr. Paul Drouillard and Sedgwick. (Sedgwick

CMS administered claims for DHL., as it did for Coke in this case.)

Plaintiffs’ attorney is a Michigan workers compensation specialist representing injured

workers. He detests the widespread use by workers compensation claims adjusters of dishonest

IME doctors to cut off benefits. 

Dr. Drouillard will be shown to be the king of cut off doctor s, doing about 1,100 exams

per year and earning about $600,000 per year for doing so. Insurers and their lawyers select Dr.

Drouillard to do IMEs because they know he will almost always write a report they can use to

cut off benefits - a report finding no work related disability. 

The proofs will show that Sedgwick has in DHL cases done what it did here - hire Dr.

Drouillard and one or two other physicians whom who are notorious for never or extremely rarely

finding work-related disability. Sedgwick and or their Michigan workers compensation defense

attorneys knew these doctors would certainly or almost certainly write a report finding no workrelated disability. 

Among the scores of Michigan doctors performing so called “independent medical

examinations” at the request of insurers, perhaps a dozen are notorious for never or very rarely

finding work related disability. These physicians find no work related disability despite reports

from treating surgeons who do find work related disability and who, unlike the IME doctors, do

not receive three or four or six hundred thousand dollars from workers compensation insurers to

do IMEs. 

Cut off doctors such as Drouillard cause intense misery to thousands of Michigan workers

each year, causing them to lose their workers compensation weekly check and their medical care.

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These doctors and the claims adjusters who hire them defeat the goal of workers compensation

legislation - to provide prompt compensation and treatment to injured workers. 

The Michigan Supreme Court recognized this goal in McAvoy v H. B. Sherman Co. 401

Mich 419, 258 NW2d 414 (1977):

Any worker’s compensation schema has, therefore, as its primary goal, the

delivery of sustaining benefits to a disabled employee as soon as possible after an

injury occurs, regardless of any traditional concepts of tort liability. The

objective of the social legislation is to provide the disabled worker with benefits

during the period of his disability so that the workers and his dependents may

survive (literally) the catastrophe which the temporary cessation of necessary

income occasions.. [emphasis by the Court]

This schema of prompt delivery of benefits to injured workers is also defeated by a

practice used by Sedgwick and many other insurers: denying benefits from the start for no

legitimate reason - not even relying upon a cut off doctor. Mr. Scharnitzke claims Sedgwick did

so in this case.

Michigan law does not punish fraudulent denial by insurers or fraudulent medical reports

by IME doctors. Ironically, the Notice of Dispute form created by the Michigan Workers

Compensation Agency warns insurers they may be punished for fraudulent denial of benefits, but

the warning is a joke - no provision of the Workers Disability Compensation Act punishes

fraudulent denial of benefits or fraudulent IME reports. No claims adjuster, insurer or doctor

has ever been prosecuted or sued civilly by the State of Michigan for fraudulent denial of workers

compensation. 

Civil RICO alone promises to compensate injured workers for fraudulent denial of their

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benefits and fraudulent IME reports, and by the trebling of damages and award of attorney fees

deter similar wrongful conduct.

Attached is an article from Inside Counsel magazine about the 2008 Sixth Circuit decision

in Brown. 

/s/ Marhsall Lasser 

Marshall Lasser PC, by 

Marshall Lasser P25573

po box 2579

Southfield MI 48307

(248) 647 7722

Dated: May 5, 2009

C:\wp51\DOCS\CocaColaRICO\RICOCaseStatement.wpd

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