Doctor claims Mike Morse demanded kickbacks

July 18--Southfield attorney Mike Morse demanded kickbacks and fudged test results in return for patient referrals, according to claims made by a Clarkston doctor who plead guilty to conspiracy to commit wire fraud.

Dr. Ram Gunabalan swore to the accusations in a 49-page affidavit filed in federal court last week. The document lays out a series of allegations of questionable dealings Gunabalan said he had with Morse and others related to the treatment of auto accident patients in lawsuits.

More: Attorney Mike Morse cleared of charging excessive fees

I.W. Winsten, an attorney for Morse, said Gunabalan's affidavit is filled with false statements and that his client did not engage in any improper activity.

In the affidavit, part of a racketeering lawsuit filed by State Farm Insurance Co. against Gunabalan and other health care providers who saw no-fault insurance patients, the doctor accuses Morse of :

* Boasting about how he controls chiropractors and saying he always uses them because they "do what he says."

* Pressuring Gunabalan to alter MRI test results to show injuries.

* Demanding that Gunabalan hire Morse's brother-in-law for a do-nothing job at $80,000 per year as a way to compensate Morse for patient referrals.

* Asking Gunabalan to invest in a lawsuit funding company his brother-in-law was running.

* Asking Gunabalan to contribute to Morse's preferred judicial candidates.

Gunabalan provided the affidavit after State Farm agreed to dismiss its claims against him, prompting attorneys for other providers to object to what they called "the likely quid pro quo between the dismissal order and the affidavit."

"Gunabalan is in prison for crimes he admits he committed that involved dishonesty. In exchange for his Affidavit, State Farm dismissed Gunabalan the next day from a lawsuit in which State Farm had been seeking millions of dollars from him," Winsten said. "Gunabalan's affidavit is filled with false statements and was given to State Farm to escape liability for what he did. There is no reason to believe anything that Gunabalan says."

More: Fieger files 5th sexual assault lawsuit against Mike Morse

Gunabalan couldn't be reached. His attorney in the lawsuit, Jack Mazzara, declined comment.

The allegations are the latest legal trouble for Morse, a personal injury lawyer made famous through heavy advertising on local television with the tagline "Mike wins."

Morse is facing numerous lawsuits filed by rival attorney Geoffrey Fieger on behalf of five women who claim that Morse groped them. One of those cases prompted a criminal investigation by the Farmington Hills Police, though no charges have been filed.

The Michigan Attorney Grievance Commission last year charged Morse with misconduct, but the charges were either dropped or dismissed by the Michigan Attorney Discipline Board.

Drumming up business

In the affidavit, Gunabalan said he first met Morse in the mid-1990s, when Morse deposed him in a lawsuit. They met again in the early 2000s, when Gunabalan was drumming up business for Bio-Magnetic Resonance Inc., a Madison Heights-based business he owned to perform MRI tests.

Gunabalan was seeking business from Morse when he was invited to Morse's office. There, Gunabalan said, Morse boasted of how he controlled chiropractors treating his injured legal clients.

"He commented to me that he can tell chiropractors what to do and they follow his direction," Gunabalan testified.

Gunabalan said Morse showed off his computer which he used to track clients' medical care.

"The file that Morse showed me on his computer contained detailed information about treating doctors and the actual medical reports, which he told me he used to direct the provider about what to do next, as though he was the doctor," Gunabalan said. "He was proud of the system. Morse then said to me, 'I will tell my chiropractors to send you cases.'"

But Morse eventually exploited the relationship, Gunabalan said, often underpaying for tests.

"I did not challenge the payments that Bio-Magnetic received from Morse because I wanted to continue to receive referrals from Morse, which were both voluminous and profitable," Gunabalan said.

Under the no-fault insurance system in Michigan, attorneys who represent people who were in auto accidents can get a one-third cut of their client's medical billings after the client's lawsuit is settled.

Altered tests

Gunabalan said he began meeting monthly with Morse at the Skyline Club in Southfield.

"In late 2009, Morse started to pressure me for MRIs to be altered or over-read to make them look more abnormal," Gunabalan said. "I understood he wanted reads with abnormal results to increase the value of his clients' bodily injury claims and his own fees through his contingency arrangements with such clients."

Morse also complained to Gunabalan in e-mails about seeing too many MRIs with normal findings, writing, "You guys are trying to put me out of business," and "Killing me."

"The message conveyed to me by these e-mails was that Morse was unhappy with the results and reports from Bio-Magnetic, which showed patients had normal results," Gunabalan wrote. "He wanted and expected Bio-Magnetic to alter and overread MRI results to produce abnormal results or Morse would stop directing referrals to Bio-Magnetic."

Brother-in-law's job

Morse also demanded that Gunabalan hire Mark Radom, who was then Morse's brother-in-law, for $80,000 a year to do marketing.

"I knew that hiring and paying Radom was effectively paying a kickback to Morse," Gunabalan said. "It was clear to me that if I didn't hire Radom, Bio-Magnetic would lose referrals from Morse."

Gunabalan said that he hired Radom in January 2010 at the agreed-upon rate, even though Radom didn't do any actual work at the MRI center and Gunabalan never even saw him come in.

Gunabalan said he eventually ended the payments by spring 2011 after Radom "confirmed" to him that he had an ownership stake in a competing MRI center.

In addition, Gunabalan said he was approached in October 2015 by two women who were trying to start a medical transportation company that would transport Morse's clients.

"They told me that Morse promised them patients and to keep the business occupied if they paid him $10,000 per month in kickbacks," Gunabalan said. "They also said that Morse said he had 6,000 clients."

Gunabalan said he declined to invest in the women's business.

Gunabalan also said that at Morse's requests, he contributed to political campaigns, including judicial candidates selected by Morse.

Guilty plea to wire fraud

In a separate 2013 case, 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 case.

Gunabalan is serving his time at a federal prison in Lexington, Ky.

Contact John Wisely: 248-858-2262 or [email protected]. Follow him on Twitter @jwisely.

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