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`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.1 Filed 08/13/21 Page 1 of 47
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`LIBERTY INSURANCE CORPORATION, LIBERTY
`MUTUAL
`FIRE
`INSURANCE
`COMPANY,
`LIBERTY MUTUAL PERSONAL
`INSURANCE
`COMPANY,
`LM
`GENERAL
`INSURANCE
`COMPANY, LM INSURANCE CORPORATION, LM
`PROPERTY AND CASUALTY
`INSURANCE
`COMPANY, THE LIBERTY SURPLUS INSURANCE
`CORPORATION,
`SAFECO
`INSURANCE
`COMPANY OF AMERICA, SAFECO INSURANCE
`COMPANY OF
`ILLINOIS,
`and
`SAFECO
`INSURANCE COMPANY OF INDIANA,
`
` Plaintiffs,
`v.
`
`
`C.A. No.
`
`
`
`
`DEMAND FOR JURY TRIAL
`
`
` 4
`
` TRANSPORT INC., 411 HELP LLC, 4 UR
`RECOVERY THERAPY LLC, A1 OCCUPATIONAL
`THERAPY LLC, GRAVITY IMAGING LLC, SPINE
`AND HEALTH PLLC, SPINE & HEALTH PLLC II,
`NEW HORIZON CHIROPRACTIC PLLC, FIRST
`MEDICAL
`GROUP
`PLLC,
`4
`HEALTH
`MANAGEMENT LLC, HMRF FUND III LLC, HMRF
`FUND IV LLC, VELOCITY MRS FUND IV LLC,
`VELOCITY MRS FUND V LLC, VELOCITY MRS
`FUND VI LLC, NATIONAL HEALTH FINANCE
`DM, LLC, HASSAN FAYAD, MIRNA FAYAD,
`WILLIAM GONTE, M.D., GEOFFREY KEMOLI
`SAGALA, D.C., AND ERNESTO CARULLA, P.T.,
`
` Defendants.
`
`DAVID JOSEPH LANKFORD (P47881)
`STEVEN M. BRAUN (P79461)
`JOY WEBER (P77088)
`Law Offices of Greig, Kennedy, Seifert and
`Fitzgibbons
`Attorneys for Plaintiffs
`28411 Northwestern Hwy., Suite 640
`Southfield, MI 48034
`248-223-0120
`Fax: 603-334-9174
`
`
`
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`Page 1 of 45
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`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.2 Filed 08/13/21 Page 2 of 47
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`COMPLAINT
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`Plaintiffs LIBERTY INSURANCE CORPORATION, LIBERTY MUTUAL FIRE
`
`INSURANCE COMPANY, LIBERTY MUTUAL PERSONAL INSURANCE COMPANY, LM
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`GENERAL INSURANCE COMPANY, LM INSURANCE CORPORATION, LM PROPERTY
`
`AND CASUALTY INSURANCE COMPANY, THE LIBERTY SURPLUS INSURANCE
`
`CORPORATION, SAFECO
`
`INSURANCE COMPANY OF AMERICA, SAFECO
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`INSURANCE COMPANY OF ILLINOIS, and SAFECO INSURANCE COMPANY OF
`
`INDIANA, along with any and all affiliate and/or agent companies, (hereinafter collectively
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`referred to as “Plaintiffs Liberty and Safeco”), by their attorneys, Law Offices of Greig,
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`Kennedy, Seifert and Fitzgibbons, hereby allege as follows.
`
`I.
`
`INTRODUCTION
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`1.
`
`This matter revolves around a concerted effort by three pain management clinics
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`(Defendants Spine & Health PLLC, Spine & Health PLLC II, and First Medical Group PLLC),
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`physical therapy clinics (Defendants 411 Help, LLC and 4 UR Recovery Therapy LLC), a
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`chiropractic clinic (Defendant New Horizon Chiropractic PLLC), an occupational therapy clinic
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`(Defendant A1 Occupational Therapy LLC), a magnetic resonance imaging (“MRI”) facility
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`(Defendant Gravity Imaging, LLC), a transportation company (Defendant 4 Transport Inc.), a
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`marketing company (Defendant 4 Health Management LLC), and the current and former owners,
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`managers, employees, independent contractors, agents, and representatives of the same who
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`collectively constructed a scheme with which to rely on fraudulent and unlawful treatment and/or
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`referrals to seek recovery of medical or other benefits potentially available under the Michigan
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`No-Fault Act, Mich. Comp. Laws § 500.3101 and in violation thereof , et seq.
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`Page 2 of 45
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`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.3 Filed 08/13/21 Page 3 of 47
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`2.
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`Specifically
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`these Defendants have operated a
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`referral and marketing
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`company/call center to solicit Plaintiffs Liberty’s and Safeco’s insureds to facilities owned,
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`managed, staffed and/or operated by the named Defendants HASSAN FAYAD, MIRNA
`
`FAYAD, WILLIAM GONTE, M.D., GEOFFREY KEMOLI SAGALA, D.C., AND ERNESTO
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`CARULLA, P.T.
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`3.
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`In furtherance of this scheme, Defendants defrauded Plaintiffs Liberty and Safeco
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`by submitting and/or causing to be submitted false and fraudulent medical records, documents,
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`correspondences, bills, and invoices through interstate wires and/or the U.S. Mail seeking
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`payment under the Michigan No-Fault Act for treatment and services that were not actually
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`rendered, were medically unnecessary, were fraudulently billed, and/or were not lawfully
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`rendered; and causing to be submitted false and fraudulent medical records, documents,
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`correspondences, bills, and invoices to Medicare and/or Medicaid.
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`4.
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`Defendants 4 Transport Inc. (hereinafter “Defendant 4 Transport”), 411 Help,
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`LLC d/b/a 411 Therapy (hereinafter “Defendant 411 Therapy”), 4 UR Recovery Therapy LLC
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`(hereinafter “Defendant 4 UR Recovery”), A1 Occupational Therapy LLC (hereinafter
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`“Defendant A1”), Gravity Imaging, LLC (hereinafter “Defendant Gravity Imaging”), Spine &
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`Health PLLC and Spine & Health PLLC II (hereinafter collectively “Defendant Spine &
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`Health”), New Horizon Chiropractic PLLC (hereinafter “Defendant New Horizon”), First
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`Medical Group, PLLC (hereinafter “Defendant First Medical”), 4 Health Management LLC
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`(hereinafter “Defendant 4 Health”), HMRF Fund III LLC (hereinafter “Defendant HMRF III”),
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`HMRF Fund IV LLC (hereinafter “Defendant HMRF IV”), Velocity MRS Fund IV LLC
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`(hereinafter “Defendant Velocity IV”), Velocity MRS Fund V LLC (hereinafter “Defendant
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`Velocity V”), Velocity MRS Fund VI LLC (hereinafter “Defendant Velocity VI”), National
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`Page 3 of 45
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`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.4 Filed 08/13/21 Page 4 of 47
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`Health Finance DM, LLC (hereinafter “Defendant National Health”), Hassan Fayad, Mirna
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`Fayad, William Gonte, M.D. (hereinafter “Defendant Gonte”), Geoffrey Kemoli Sagala, D.C.
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`(hereinafter “Defendant Sagala”), and Ernesto Carulla, P.T. (hereinafter “Defendant Carulla”)
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`(collectively hereinafter “Defendants”) each individually or collectively conspired to, and did in
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`fact, defraud Plaintiffs Liberty and Safeco by perpetuating an insurance billing fraud scheme in
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`violation of state and federal law.
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`5.
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`The insurance fraud scheme perpetrated by Defendants was designed to, and did
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`in fact, result in payments from Plaintiffs Liberty and Safeco to Defendants and/or its
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`subsidiaries, agents, etc., directly or on behalf of Plaintiffs Liberty’s and Safeco’s insureds and
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`claimants.
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`6.
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`All of the acts and omissions of Defendants, described throughout this Complaint,
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`were undertaken intentionally.
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`7.
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`By this Complaint, and as detailed in each count set out below, Plaintiffs Liberty
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`and Safeco brings this action for: (1) violations of the federal Racketeer Influenced and Corrupt
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`Organizations (RICO) Act, 18 U.S.C. § 1962(c) and (d), and/or; (2) common law fraud, and/or;
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`(3) civil conspiracy, and/or; (4) payment under mistake of fact, and/or; (5) unjust enrichment.
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`Plaintiffs Liberty and Safeco also seek declaratory relief that no previously denied and pending
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`claims submitted to it by Defendants are compensable.
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`8.
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`As a result of Defendants’ fraudulent acts, Plaintiffs Liberty and Safeco, has paid
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`in excess of $1,801,142.40 to Defendants related to the patients at issue in this Complaint.
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`II. THE PARTIES
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`9.
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`Plaintiffs Liberty and Safeco hereby reallege and incorporate by reference each
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`and every allegation contained in paragraphs 1 through 8 as though fully set forth herein.
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`Page 4 of 45
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`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.5 Filed 08/13/21 Page 5 of 47
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`A. Plaintiffs
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`10.
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`Plaintiff Liberty Insurance Corporation is an insurance company with its principal
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`place of business in Boston, Massachusetts duly organized under the laws of Illinois that is
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`licensed in Michigan to engage in the business of insurance.
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`11.
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`Plaintiff Liberty Mutual Fire Insurance Company is an insurance company with
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`its principal place of business in Boston, Massachusetts duly organized under the laws of
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`Wisconsin that is licensed in Michigan to engage in the business of insurance.
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`12.
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`Plaintiff Liberty Mutual Personal Insurance Company is an insurance company
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`with its principal place of business in Boston, Massachusetts duly organized under the laws of
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`New Hampshire that is licensed in Michigan to engage in the business of insurance.
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`13.
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`Plaintiff LM General Insurance Company is an insurance company with its
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`principal place of business in Boston, Massachusetts duly organized under the laws of Indiana
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`that is licensed in Michigan to engage in the business of insurance.
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`14.
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`Plaintiff LM Insurance Corporation is an insurance company with its principal
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`place of business in Boston, Massachusetts duly organized under the laws of Illinois that is
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`licensed in Michigan to engage in the business of insurance.
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`15.
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`Plaintiff LM Property and Casualty Insurance Company is an insurance company
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`with its principal place of business in Boston, Massachusetts duly organized under the laws of
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`Indiana that is licensed in Michigan to engage in the business of insurance.
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`16.
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`Plaintiff The Liberty Surplus Insurance Corporation is an insurance company with
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`its principal place of business in Boston, Massachusetts duly organized under the laws of New
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`Hampshire that is licensed in Michigan to engage in the business of insurance.
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`Page 5 of 45
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`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.6 Filed 08/13/21 Page 6 of 47
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`17.
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`Plaintiff Safeco Insurance Company of America is an insurance company with its
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`principal place of business in Seattle, Washington duly organized under the laws of Iowa that is
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`licensed in Michigan to engage in the business of insurance.
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`18.
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`Safeco Insurance Company of Illinois is an insurance company with its principal
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`place of business in Bellevue, Washington duly organized under the laws of Iowa that is licensed
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`in Michigan to engage in the business of insurance.
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`19.
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`Safeco Insurance Company of Indiana is an insurance company with its principal
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`place of business in Bellevue, Washington duly organized under the laws of Iowa that is licensed
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`in Michigan to engage in the business of insurance.
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`B. Defendants
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`i. Defendant 4 Transport LLC
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`20.
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`Defendant 4 Transport, Inc. is incorporated under the laws of the State of
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`Michigan.
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`21.
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`Defendant 4 Transport is owned by Defendant Mirna Fayad, who is a citizen of
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`the State of Michigan.
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`22.
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`At all relevant times, Defendant 4 Transport was operated and controlled by
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`Defendants 411 Therapy, 4 UR Recovery, A1, Gravity Imaging, New Horizon, Spine & Health,
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`First Medical, 4 Health, HMRF III, HMRF IV, Velocity IV, Velocity V, Velocity VI, National
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`Health, Hassan Fayad, Mirna Fayad, Gonte, Sagala, and Carulla.
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`23.
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`Defendant 4 Transport's principal place of business is located in Dearborn,
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`Michigan.
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`24.
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`Defendant 4 Transport billed Plaintiffs Liberty and Safeco for services that were
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`not actually provided, and/or were medically unnecessary (to the extent services were provided
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`Page 6 of 45
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`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.7 Filed 08/13/21 Page 7 of 47
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`at all), and/or were unlawful in relation to several claims made under policies of insurance with
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`Plaintiffs Liberty and Safeco. (Exhibit 1: Spreadsheets of Claims and Payments of Defendant
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`4 Transport).
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`ii. Defendant 411 Help, LLC d/b/a 411 Therapy
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`25.
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`Defendant 411 Help, LLC is a limited liability company organized under the laws
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`of Delaware and is properly licensed to transact business in the State of Michigan.
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`26.
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`Defendant 411 Help, LLC (referenced hereinafter as “Defendant 411 Therapy”)
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`also does business using the registered name 411 Therapy.
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`27.
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`Defendant 411 Therapy is owned by Defendant Mirna Fayad, who is a citizen of
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`the State of Michigan.
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`28.
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`At all relevant times, Defendant 411 Therapy was operated and controlled by
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`Defendants 4 Transport, 4 UR Recovery, A1, Gravity Imaging, New Horizon, Spine & Health,
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`First Medical, 4 Health, HMRF III, HMRF IV, Velocity IV, Velocity V, Velocity VI, National
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`Health, Hassan Fayad, Mirna Fayad, Gonte, Sagala, and Carulla.
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`29.
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`Defendant 411 Therapy's principal place of business is located in Southfield,
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`Michigan.
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`30.
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`Defendant 411 Therapy billed Plaintiffs Liberty and Safeco for services that were
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`not actually rendered, were medically unnecessary (to the extent services were rendered at all),
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`and were unlawful in relation to several claims made under policies of insurance with Plaintiffs
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`Liberty and Safeco. (Exhibit 2: Spreadsheets of Claims and Payments of Defendant 411
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`Therapy).
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`Page 7 of 45
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`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.8 Filed 08/13/21 Page 8 of 47
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`iii. Defendant 4 UR Recovery Therapy, LLC
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`31.
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`Defendant 4 UR Recovery Therapy LLC is organized under the laws of the State
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`of Michigan.
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`32.
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`Defendant 4 UR Recovery is owned by Defendant Mirna Fayad, who is a citizen
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`of the State of Michigan.
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`33.
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`At all relevant times, Defendant 4 UR Recovery was operated and controlled by
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`Defendants 4 Transport, 411 Therapy, A1, Gravity Imaging, New Horizon, Spine & Health, First
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`Medical, 4 Health, HMRF III, HMRF IV, Velocity IV, Velocity V, Velocity VI, National Health,
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`Hassan Fayad, Mirna Fayad, Gonte, Sagala, and Carulla.
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`34.
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`Defendant 4 UR Recovery's principal place of business is located in Detroit,
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`Michigan.
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`35.
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`Defendant 4 UR Recovery billed Plaintiffs Liberty and Safeco for services that
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`were not actually rendered, were medically unnecessary (to the extent services were rendered at
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`all), and were unlawful in relation to several claims made under policies of insurance with
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`Plaintiffs Liberty and Safeco. (Exhibit 3: Spreadsheets of Claims and Payments of Defendant
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`4 UR Recovery).
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`iv. Defendant A1 Occupational Therapy LLC
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`36.
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`Defendant A1 Occupational Therapy LLC is organized under the laws of the State
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`of Michigan.
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`37.
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`Defendant A1 is owned by Defendants Hassan Fayad and Mirna Fayad, who are
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`both citizens of the State of Michigan.
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`38.
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`At all relevant times, Defendant A1 was operated and controlled by Defendants 4
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`Transport, 411 Therapy, 4 UR Recovery, Gravity Imaging, New Horizon, Spine & Health, First
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`Page 8 of 45
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`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.9 Filed 08/13/21 Page 9 of 47
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`Medical, 4 Health, HMRF III, HMRF IV, Velocity IV, Velocity V, Velocity VI, National Health,
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`Hassan Fayad, Mirna Fayad, Gonte, Sagala, and Carulla.
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`39.
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`40.
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`Defendant A1's principal place of business is located in Southfield, Michigan.
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`Defendant A1 billed Plaintiffs Liberty and Safeco for services that were not
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`actually rendered, were medically unnecessary (to the extent services were rendered at all), and
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`were unlawful in relation to several claims made under policies of insurance with Plaintiffs
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`Liberty and Safeco. (Exhibit 4: Spreadsheets of Claims and Payments of Defendant A1).
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`v. Defendant Gravity Imaging, LLC
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`41.
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`Defendant Gravity Imaging, LLC is organized under the laws of the State of
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`Michigan.
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`42.
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`Defendant Gravity Imaging is owned by Defendants Hassan Fayad and Mirna
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`Fayad, who are both citizens of the State of Michigan.
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`43.
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`At all relevant times, Defendant Gravity Imaging was operated and controlled by
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`Defendants 4 Transport, 411 Therapy, 4 UR Recovery, A1, New Horizon, Spine & Health, First
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`Medical, 4 Health, HMRF III, HMRF IV, Velocity IV, Velocity V, Velocity VI, National Health,
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`Hassan Fayad, Mirna Fayad, Gonte, Sagala, and Carulla.
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`44.
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`Defendant Gravity Imaging's principal place of business is located in Madison
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`Heights, Michigan, sharing the building with Defendant First Medical.
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`45.
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`Defendant Gravity Imaging billed Plaintiffs Liberty and Safeco for services that
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`were medically unnecessary (to the extent services were rendered at all) and were unlawful in
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`relation to several claims made under policies of insurance with Plaintiffs Liberty and Safeco.
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`(Exhibit 5: Spreadsheets of Claims and Payments of Defendant Gravity).
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`Page 9 of 45
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`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.10 Filed 08/13/21 Page 10 of 47
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`vi. Defendant Spine & Health PLLC
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`46.
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`Defendant Spine & Health PLLC is organized under the laws of the State of
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`Michigan.
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`47.
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`Defendant Spine & Health PLLC also does business using the registered name
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`SHP Services to provide medications to patients through a non-licensed office manager, and
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`other non-licensed office personnel, without proper licensing.
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`48.
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`Defendant Spine & Health PLLC is owned by Defendant Gonte, who is a citizen
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`of the State of Michigan.
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`49.
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`At all relevant times, Defendant Spine & Health PLLC was operated and
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`controlled by Defendants 4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging, New
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`Horizon, 4 Health, HMRF III, HMRF IV, Velocity IV, Velocity V, Velocity VI, National Health,
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`Hassan Fayad, Mirna Fayad, Gonte, Sagala, and Carulla.
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`50.
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`Defendant Spine & Health PLLC's principal place of business is located in
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`Southfield, Michigan.
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`51.
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`Defendant Spine & Health PLLC billed Plaintiffs Liberty and Safeco for services
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`that were not actually provided, were medically unnecessary (to the extent services were
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`provided at all), and were unlawful in relation to several claims made under policies of insurance
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`with Plaintiffs Liberty and Safeco. (Exhibit 6: Spreadsheets of Claims and Payments of
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`Defendant Spine & Health PLLC, Spine & Health II PLLC, First Medical Group, &
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`William Gonte, MD).
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`vii. Defendant Spine & Health II PLLC
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`52.
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`Defendant Spine & Health II PLLC is organized under the laws of the State of
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`Michigan.
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`Page 10 of 45
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`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.11 Filed 08/13/21 Page 11 of 47
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`53.
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`Defendant Spine & Health II PLLC also does business using the registered
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`fictitious name SHP Services to provide medications to patients through a non-licensed office
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`manager without proper licensing.
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`54.
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`Defendant Spine & Health II PLLC is the secondary location of Defendant Spine
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`& Health PLLC located in Clinton Twp. MI and operates in the same manner and scheme as
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`Defendant Spine & Health PLLC.
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`55.
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`Defendant Spine & Health II PLLC is owned by Defendant Gonte, who is a
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`citizen of the State of Michigan.
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`56.
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`At all relevant times, Defendant Spine & Health II PLLC was operated and
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`controlled by Defendants 4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging, New
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`Horizon, 4 Health, HMRF III, HMRF IV, Velocity IV, Velocity V, Velocity VI, National Health,
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`Hassan Fayad, Mirna Fayad, Gonte, Sagala, and Carulla.
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`57.
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`Defendant Spine & Health II PLLC billed Plaintiffs Liberty and Safeco for
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`services that were not actually provided, were medically unnecessary (to the extent services were
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`provided at all), and were unlawful in relation to several claims made under policies of insurance
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`with Plaintiffs Liberty and Safeco. (Ex. 6).
`
`viii. Defendant New Horizon Chiropractic PLLC
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`58.
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`Defendant New Horizon Chiropractic PLLC is organized under the laws of the
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`State of Michigan.
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`59.
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`Defendant New Horizon is owned by Defendant Sagala, who is a citizen of the
`
`State of Michigan.
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`60.
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`At all relevant times, Defendant New Horizon was operated and controlled by
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`Defendants 4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging, Spine & Health,
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`Page 11 of 45
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`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.12 Filed 08/13/21 Page 12 of 47
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`First Medical, 4 Health, HMRF III, HMRF IV, Velocity IV, Velocity V, Velocity VI, National
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`Health, Hassan Fayad, Mirna Fayad, Gonte, Sagala, and Carulla..
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`61.
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`Defendant New Horizon's principal place of business is located in Dearborn,
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`Michigan.
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`62.
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`Defendant New Horizon billed Plaintiffs Liberty and Safeco for services that were
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`not actually provided, were medically unnecessary (to the extent services were provided at all),
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`and were unlawful in relation to several claims made under policies of insurance with Plaintiffs
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`Liberty and Safeco. (Exhibit 7: Spreadsheet of Claims and Payments of Defendant New
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`Horizon).
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`ix. First Medical Group PLLC
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`63.
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`Defendant First Medical Group, PLLC is organized under the laws of the State of
`
`Michigan.
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`64.
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`Defendant First Medical is owned by Defendant Gonte who is a citizen of the
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`State of Michigan.
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`65.
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`Defendant First Medical operates as the successor to Defendant Spine & Health
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`PLLC.
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`66.
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`At all relevant times, Defendant First Medical was operated and controlled by
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`Defendants 4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging, New Horizon, 4
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`Health, HMRF III, HMRF IV, Velocity IV, Velocity V, Velocity VI, National Health, Hassan
`
`Fayad, Mirna Fayad, Gonte, Sagala, and Carulla.
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`67.
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`Defendant First Medical's principal place of business is located in Madison
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`Heights, Michigan, in the same building as Defendant Gravity Imaging.
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`Page 12 of 45
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`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.13 Filed 08/13/21 Page 13 of 47
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`68.
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`Defendant First Medical billed Plaintiffs Liberty and Safeco for services that were
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`not actually provided, were medically unnecessary (to the extent services were provided at all),
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`and were unlawful in relation to several claims made under policies of insurance with Plaintiffs
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`Liberty and Safeco. (Ex. 6).
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`x. Defendant 4 Health Management LLC
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`69.
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`Defendant 4 Health Management LLC is organized under the laws of the State of
`
`Michigan.
`
`70.
`
`Defendant 4 Health is owned by Hassan Fayad, who is a citizen of the State of
`
`Michigan.
`
`71.
`
`72.
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`Defendant 4 Health's principal place of business is located in Dearborn, Michigan.
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`Defendant 4 Health illegally and improperly induced individuals to undergo the
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`aforementioned unlawful and medically unnecessary treatment (to the extent treatment was
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`provided at all) billed to Plaintiffs Liberty and Safeco by Defendants 4 Transport, 411 Therapy, 4
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`UR Recovery, A1, Gravity Imaging, Spine & Health, New Horizon, and First Medical through
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`unlawful solicitation, including contacting individuals mere hours after accidents occurred.
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`xi. Defendant HMRF Fund III LLC
`
`73.
`
`74.
`
`Defendant HMRF Fund III LLC is organized under the laws of the State of Texas.
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`Defendant HMRF III is owned by Ovation Alternative Income Fund, L.P., a
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`limited partnership for which all partners are citizens of the State of Texas.
`
`75.
`
`76.
`
`Defendant HMRF III 's principal place of business is located in Austin, Texas.
`
`Defendant HMRF III is owned by Ovation Alternative Income Fund, L.P. and/or
`
`Ovation Management LLC, a limited partnership for which all partners are citizens of the State
`
`of Texas.
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`Page 13 of 45
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`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.14 Filed 08/13/21 Page 14 of 47
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`77.
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`Defendant HMRF III provided the liquidity and funding that allowed Defendants
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`4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging, Spine & Health, New Horizon,
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`and First Medical to bill for the medically unnecessary and unlawful treatment detailed herein.
`
`78.
`
`Defendant HMRF III also is also believed to have purchased accounts receivable
`
`from Defendants 4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging, Spine &
`
`Health, New Horizon, and First Medical and pursued said billing for medically unnecessary and
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`unlawful treatment detailed herein.
`
`xii. Defendant HMRF Fund IV LLC
`
`79.
`
`80.
`
`Defendant HMRF Fund IV LLC is organized under the laws of the State of Texas.
`
`Defendant HMRF IV is owned by Ovation Alternative Income Fund, L.P. and/or
`
`Ovation Management LLC, a limited partnership for which all partners are citizens of the State
`
`of Texas.
`
`81.
`
`82.
`
`Defendant HMRF IV 's principal place of business is located in Austin, Texas.
`
`Defendant HMRF IV provided the liquidity and funding that allowed Defendants
`
`4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging, Spine & Health, New Horizon,
`
`and First Medical to bill for the medically unnecessary and unlawful treatment detailed herein.
`
`83.
`
`Defendant HMRF IV also is also believed to have purchased accounts receivable
`
`from Defendants 4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging, Spine &
`
`Health, New Horizon, and First Medical and pursued said billing for medically unnecessary and
`
`unlawful treatment detailed herein.
`
`xiii. Defendant Velocity MRS Fund IV
`
`84.
`
`Defendant Velocity MRS Fund IV is organized under the laws of the State of
`
`Texas.
`
`Page 14 of 45
`
`
`
`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.15 Filed 08/13/21 Page 15 of 47
`
`
`
`85.
`
`Defendant Velocity IV is owned by Ovation Alternative Income Fund, L.P. and/or
`
`Ovation Management LLC, a limited partnership for which all partners are citizens of the State
`
`of Texas.
`
`86.
`
`87.
`
`Defendant Velocity IV 's principal place of business is located in Austin, Texas.
`
`Defendant Velocity IV provided the liquidity and funding that allowed
`
`Defendants 4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging, Spine & Health,
`
`New Horizon, and First Medical to bill for the medically unnecessary and unlawful treatment
`
`detailed herein.
`
`88.
`
`Defendant Velocity IV also is also believed to have purchased accounts
`
`receivable from Defendants 4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging,
`
`Spine & Health, New Horizon, and First Medical and pursued said billing for medically
`
`unnecessary and unlawful treatment detailed herein.
`
`xiv. Defendant Velocity MRS Fund V
`
`89.
`
`Defendant Velocity MRS Fund V is organized under the laws of the State of
`
`Texas.
`
`90.
`
`Defendant Velocity V is believed to be owned by multiple individuals in multiple
`
`states in the United States with its principle place of business located in Texas.
`
`91.
`
`92.
`
`Defendant Velocity V's principal place of business is located in Austin, Texas.
`
`Defendant Velocity V provided the liquidity and funding that allowed Defendants
`
`4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging, Spine & Health, New Horizon,
`
`and First Medical to bill for the medically unnecessary and unlawful treatment detailed herein.
`
`93.
`
`Velocity V also is also believed to have purchased accounts receivable from
`
`Defendants 4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging, Spine & Health,
`
`Page 15 of 45
`
`
`
`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.16 Filed 08/13/21 Page 16 of 47
`
`
`
`New Horizon, and First Medical and pursued said billing for medically unnecessary and
`
`unlawful treatment detailed herein.
`
`xv. Defendant Velocity MRS Fund VI
`
`94.
`
`Defendant Velocity MRS Fund VI is organized under the laws of the State of
`
`Texas.
`
`95.
`
`Defendant Velocity IV is owned by Ovation Alternative Income Fund, L.P. and/or
`
`Ovation Management LLC, a limited partnership for which all partners are citizens of the State
`
`of Texas.
`
`96.
`
`97.
`
`Defendant Velocity IV 's principal place of business is located in Austin, Texas.
`
`Defendant Velocity IV provided the liquidity and funding that allowed
`
`Defendants 4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging, Spine & Health,
`
`New Horizon, and First Medical to bill for the medically unnecessary and unlawful treatment
`
`detailed herein.
`
`98.
`
`Defendant Velocity IV also is also believed to have purchased accounts
`
`receivable from Defendants 4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging,
`
`Spine & Health, New Horizon, and First Medical and pursued said billing for medically
`
`unnecessary and unlawful treatment detailed herein.
`
`xvi. Defendant National Health Finance DM, LLC
`
`99.
`
`Defendant National Health Finance DM, LLC is organized under the laws of the
`
`State of Arizona.
`
`100. Defendant National Health is owned by Mark Siegel, D.O. and David Wattel,
`
`both of whom are citizens of the State of Arizona.
`
`Page 16 of 45
`
`
`
`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.17 Filed 08/13/21 Page 17 of 47
`
`
`
`Texas.
`
`101. Defendant National Health's principal place of business is located in Austin,
`
`102. Defendant National Health provided the liquidity and funding that allowed
`
`Gravity Imaging to bill for the medically unnecessary and unlawful treatment detailed herein.
`
`xvii. Defendant Hassan Fayad
`
`103. Defendant Hassan Fayad is a resident and citizen of the State of Michigan.
`
`104. At all relevant times, Defendant Hassan Fayad operated and/or managed and/or
`
`controlled Defendant facilities 4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging,
`
`Spine & Health, First Medical, and 4 Health.
`
`xviii. Defendant Mirna Fayad
`
`105. Defendant Mirna Fayad is a resident and citizen of the State of Michigan.
`
`106. At all relevant times, Defendant Mirna Fayad operated and/or managed and/or
`
`controlled Defendant facilities 4 Transport, 411 Therapy, 4 UR Recovery, A1, Gravity Imaging,
`
`Spine & Health, New Horizon, and First Medical.
`
`xix. Defendant William Gonte, M.D.
`
`107. Defendant William Gonte, M.D. is a resident and citizen of the State of Michigan.
`
`108. At all relevant times, Defendant Gonte operated and/or managed and/or controlled
`
`and/or supervised personnel at Defendant facilities Spine & Health and First Medical.
`
`xx. Defendant Geoffrey Kemoli Sagala, D.C.
`
`109. Defendant Geoffrey Kemoli Sagala, D.C. is a resident and citizen of the State of
`
`Michigan.
`
`110. At all relevant times, Defendant Sagala operated and/or managed and/or
`
`controlled Defendant facility New Horizon.
`
`Page 17 of 45
`
`
`
`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.18 Filed 08/13/21 Page 18 of 47
`
`
`
`xxi. Defendant Ernesto Carulla, P.T.
`
`111. Defendant Ernesto Carulla, P.T. is a resident and citizen of the State of Michigan.
`
`112. At all relevant times, Defendant Carulla operated and/or managed and/or
`
`controlled Defendant facilities 411 Therapy, 4 UR Recovery, and A1.
`
`III.
`
`JURISDICTION AND VENUE
`
`113. Plaintiffs Liberty and Safeco hereby reallege and incorporate by reference each
`
`and every allegation contained in paragraphs 1 through 111 as though fully set forth herein.
`
`114. Pursuant to 28 U.S.C. § 1331, this Court has jurisdiction over this action relating
`
`to the claims brought by Plaintiffs Liberty and Safeco under 18 U.S.C. § 1961, et seq. because
`
`they arise under the laws of the United States.
`
`115. Pursuant to 28 U.S.C. § 1332, this Court has jurisdiction over this action because
`
`the amount in controversy, exclusive of interest and costs, exceeds $75,000.00 against each
`
`defendant and because it is between citizens of different states (as detailed in the foregoing
`
`section).
`
`116. Supplemental jurisdiction over Plaintiffs Liberty and Safeco’s state law claims is
`
`proper pursuant to 28 U.S.C. § 1367.
`
`117. Venue is proper pursuant to 28 U.S.C. § 1391(b)(2) whereas the vast majority of
`
`the acts at issue in this Complaint were carried out within the Eastern District of Michigan.
`
`IV. BACKGROUND ON THE DEFENDANTS AND THEIR SCHEME
`
`A. Overview of involvement of Defendant Mirna Fayad; Defendants Gonte; Sagala;
`Carulla; and their businesses and clinics, including Defendants 4 Transport, 411
`Therapy, 4 UR Recovery, A1, Gravity Imaging, Spine & Health, New Horizon,
`First Medical, and 4 Health.
`
`118. Plaintiffs Liberty and Safeco hereby reallege and incorporate by reference each
`
`and every allegation contained in paragraphs 1 through 117 as though fully set forth herein.
`
`Page 18 of 45
`
`
`
`Case 2:21-cv-11879-MAG-CI ECF No. 1, PageID.19 Filed 08/13/21 Page 19 of 47
`
`
`
`119. Defendants used the Defendant medical provider entities to submit exorbitant
`
`charges to Plaintiffs Liberty and Safeco for purported medical services, procedures, and
`
`equipment that were not actually provided, were unlawful, were not medically necessary, and/or
`
`were fraudulently billed.
`
`120. The fraudulent scheme described herein was driven by Defendant Hassan Fayad;
`
`his family, including Defendant Mirna Fayad; Defendants Gonte; Sagala; Carulla; and their
`
`businesses and clinics, including Defendants 4 Transport, 411 Therapy, 4 UR Recovery, A1,
`
`Gravity Imaging, Spine & Health, New Horizon, First Medical, and 4 Health.
`
`121. Defendants Hassan Fayad, Mirna Fayad, their family, and their associates
`
`oversaw a vast network of runners, solicitors, call center(s) and medical providers who worked in
`
`concert to identify individuals, sometimes through purchase unlawfully requested police reports
`
`of various precincts in Michigan, who claimed to have been involved in motor-vehicle accidents,
`
`and to unlawfully and improperly induce such individuals to present to Defendant medical
`
`providers, including holding themselves out to be agents for attorneys, hospitals, and Plaintiffs
`
`Liberty and Safeco to generate claims to Plaintiffs Liberty and Safeco, including through cash
`
`payments to patien
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