Attorney Joumana Kayrouz denies claim she sought kickbacks

July 18--Personal injury attorney Joumana Kayrouz emphatically denied today claims made by an imprisoned doctor that she sought kickbacks from him to help pay for her once-abundant advertising and that she secretly owned an MRI center.

Those claims by Dr. Ram Gunabalan are among an array of accusations in his sworn 49-page affidavit filed in federal court last week concerning ethically questionable and potentially illegal behavior by lawyers and medical service providers in southeast Michigan who see auto accident victims.

"I have nothing to hide. All of this is B.S.," Kayrouz said in a phone interview. "Just because someone is writing an affidavit saying A, B and C, doesn't make it so. Anybody can write anything about anybody."

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The affidavit is part of a racketeering lawsuit filed by State Farm Insurance against Gunabalan and other health care providers who saw no-fault insurance patients. Gunabalan provided the affidavit after State Farm agreed to dismiss its claims against him.

Gunabalan, who pleaded guilty earlier this year to conspiracy to commit wire fraud and is now in federal prison in Lexington, Ky., claims in the affidavit that during a 2011 meeting at a Birmingham restaurant, Kayrouz proposed that if he started paying her $200,000 a month, she would send her accident victim clients to the Madison Heights-based MRI business that Gunabalan owned, Bio-Magnetic Resonance.

"Ms. Kayrouz told me that if I agreed to the arrangement, I would write the checks to her advertising company," Gunabalan said in the affidavit. "Specifically, Ms. Kayrouz estimated that I would be able to collect $500,000 per month in MRI fees based on her referrals."

"Ultimately, I did not go forward with the arrangement because, among other things, the price was exorbitant," Gunabalan said.

Kayrouz, whose advertisements for her Southfield-based law firm have for years appeared on billboards and Detroit city buses, told the Free Press that Gunabalan's accusation is pure fiction. "I never told him to pay $200,000." she said. "Shame on him."

Kayrouz also denied Gunabalan's claim that she revealed to him that she secretly owns an MRI center in Madison Heights -- MRI Centers of Michigan -- and "has a doctor as the owner on paper."

Kayrouz said that claim is completely false -- and nonsensical.

"I do not own MRI Centers of Michigan. I do not own it." she said, adding, "If I (did) own it, why would I be allegedly agreeing to send him (MRI) business ... he's lying."

Representatives for MRI Centers of Michigan did not immediately return messages today.

A Free Press review of the MRI center's state incorporation records shows that a Dearborn Heights-based gynecologist was the business' resident agent in 2011 and someone with an illegible signature was identified as "owner". Since then, accountants have been listed as its resident agents.

High-profile attorneys

Kayrouz is one of two high-profile metro Detroit accident lawyers that the doctor names in the affidavit with detailed allegations.

Gunabalan also accused attorney Mike Morse of demanding kickbacks and fudged MRI test results in return for accident patient referrals. An attorney for Morse on Monday denied those accusations, saying Gunabalan filled his affidavit with false statements about Morse in an attempt to escape liability for his own wrongdoing.

Kayrouz said she doesn't know why Gunabalan would target her with false accusations, but suspects that it could be because she -- like Morse -- is high-profile in the region.

Lately, however, Kayrouz hasn't been advertising as heavily as she used to.

"I'm trying to take a break a little bit and then find out a new way to advertise," Kayrouz said. "Billboards aren't as effective as they used to be. People are on their phones all the time."

Gunabalan says in the affidavit that he first met Kayrouz on an August or September 2011 trip to Las Vegas that was sponsored by local NBC affiliate WDIV-TV as a treat for its advertisers.

Kayrouz and Morse were the two attorneys on that trip, he said, and sat together during a dinner hosted by the station.

"Morse told me that the two of them discussed consolidating their law practices. However, according to Morse, after they went back to Michigan, it did not work out," Gunabalan says in the affidavit.

Kickback deal?

About one month after returning from Las Vegas, Gunabalan said that Kayrouz proposed the $200,000-per-month kickback deal at Mitchell's Seafood in Birmingham.

According to Gunabalan, Kayrouz said his MRI business could generate $500,000 each month from insurance companies from her patient referrals if he did two to three MRIs on each of the 50 patients that she would send.

Kayrouz told him she calculated his proposed monthly payment by explaining that each of her firm's billboard ads cost $5,000 per month.

Gunabalan said Kayrouz wrote out these calculations on a cocktail napkin that he took home, but later threw out. There was a subsequent meeting at Beverly Hills Grill in Beverly Hills about the potential arrangement, although the deal never happened, he said.

Kayrouz told the Free Press that she did meet with Gunabalan in person, but just to discuss possible care options at a psychiatric facility that he owned at the time or was affiliated with.

"Somebody near and dear to me was going through tough times and needed institutionalization, so I wanted to inquire about treatment for him or her," Kayrouz said.

Kayrouz also said that Gunabalan's claim that she and Morse discussed merging their law practices is false and absurd.

"Michael was actually asking me would I refer to him cases. And I said 'Michael, you do car accidents, I do car accidents. Why would I refer to you my business?'" Kayrouz said. "That was the extent of that discussion. There was no talk of joining hands or anything like that. Why would I join hands with a competitor?"

WDIV-TV today also disputed the accuracy of statements in Gunabalan's affidavit, particularly that the local NBC station paid for the trip for its advertisers.

"According to our general manager, we didn't pay for a trip to take advertisers anywhere -- we did not host this trip," said Kim Voet, the station's news director.

Gunabalan also said at one time he was approached by a doctor and asked whether he wanted to buy MRI Centers of Michigan. That doctor later told him he had been a small partner in this MRI center, but Kayrouz bought him out, according to Gunabalan's affidavit.

Kayrouz says that claim is also untrue. A message left for the doctor Tuesday by the Free Press wasn't immediately returned.

Contingency fees

It's common practice under Michigan's no-fault insurance system for attorneys who represent people in auto accidents to get 33% of their client's medical billings after the client's lawsuit is settled. The reasoning behind this practice is that without the attorney's services in battling the insurance company, none of the medical bills would have gotten paid.

At the time of Gunabalan and Kayrouz's 2011 meeting, Gunabalan said Kayrouz's law firm had been sending some patient referrals to his MRI business.

And Gunabalan claims Kayrouz is known for being aggressive with her contingency fees.

"Ms. Kayrouz files a medical lien on every case and takes one-third of the medical fees no matter what, even fees voluntarily paid by auto insurers," Gunabalan said. "If a provider does not comply with Ms. Kayrouz's conditions, the provider will not get patient referrals from her."

Kayrouz said Gunabalan is wrong. She has never taken a 33% cut of a medical provider's bill while an insurance company is voluntarily paying the claim and before any suit by her law office has been filed.

"I have never ever, ever, ever taken one-third out of any voluntary payment," she said. "Although I don't think it is illegal, to me it is unethical."

Kayrouz added that some doctors in the past have approached her and suggested that she automatically take a 33% cut of their billings in exchange for patient referrals. But she said she always turned them down.

"Providers ask me all the time. 'Joumana, please send us (patients) and put your name on the checks and ask that the checks be sent to you, and please take one-third.' I say to them, 'Thank you, but I will not do that over my dead body,'" Kayrouz said.

Plea deal

In a separate 2013 case from the State Farm racketeering lawsuit, federal prosecutors in Detroit charged Gunabalan with money laundering, health care fraud, drug charges and the unauthorized use of foreign bank notes.

In February, Gunabalan negotiated a deal to plead guilty to one count of conspiracy to commit wire fraud. U.S. District Judge Paul Borman sentenced him to 20 months in prison and two years of supervised release. As part of the deal, Gunabalan agreed to forfeit $720,982. Borman also is the judge hearing the State Farm lawsuit.

Contact JC Reindl: 313-222-6631 or [email protected]. Follow him on Twitter @JCReindl.

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