Will newest allegations finally get Michigan Attorney Grievance Commission to look into auto accident attorney fraud, kickbacks and illegal solicitation of auto accident victims in Detroit?

I’ve been outspoken about the epidemic of No-Fault attorney fraud and ambulance chasing in Michigan for years on this blog.

I’ve also been critical about the failure of the Michigan Attorney Grievance Commission to take any action whatsoever to stop illegal solicitation, ambulance chasing, kickbacks, and outright fraud. This utter failure to prosecute even one case over the last decade has played a significant role in the explosion of auto accident lawyer fraud in cities like Detroit.

An ethics rule without enforcement becomes a mere suggestion, and when other Metro Detroit area auto accident attorneys see just how much money that some are making by breaking the law without any penalty whatsoever, these lawyers also jump on the bandwagon of unethical activity and illegal solicitation.

This last point was made abundantly — and painfully — clear in a news story by the Detroit Free Press about an affidavit (recently filed in a federal lawsuit) that contains sworn allegations of attorney fraud, kickback schemes, and many other examples of illegal and unethical activity.

The Dr. Ram Gunabalan affidavit

Specifically, the 49-page affidavit — sworn out by Dr. Ram Gunabalan and reported on by the Detroit Free Press in its July 17, 2017, story, “Doctor claims Mike Morse demanded kickbacks” — claims that the head of the Mike Morse law firm, TV attorney Mike Morse, demanded kickbacks from Gunabalan. Dr. Gunabalan owned an MRI facility to whom Morse referred cases for MRIs.

But, the affidavit goes on to state, Mike Morse also demanded Gunabalan doctor “normal” MRI results to make them look “abnormal” so Morse’s clients would look more injured than they really were, thereby, increasing the likelihood their auto accident or No-Fault PIP cases would settle for more money.

Gunabalan explains in his affidavit as follows:

“Morse’s ‘MO’ was to get auto cases, and feed them to chiropractors who he deemed easy to control … Morse set up a procedure where he would funnel patients to doctors, control the doctor’s revenue streams, take the doctor’s collection work, and then short-change the doctors on collections so he would have total control.” (Page 41 of the affidavit)

According to Gunabalan’s affidavit, Morse told Gunabalan what he had to do if he wanted to keep getting referrals to his MRI business, Bio-Magnetic Resonance, Inc.:

• “Morse started to pressure me for MRIs to be altered or over-read to make them look more abnormal. 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.” (Page 8 of the affidavit)
• Emails from Morse to Gunabalan conveyed the message “that Morse was unhappy with the results and reports from Bio-Magnetic, which showed patients had normal MRIs, and 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.” (Page 9 of the affidavit)
• During conversations with Morse, “Morse emphasized [to Gunabalan] … that Bio-Magnetic needed to give him abnormal MRI reports or he would stop sending his clients to Bio-Magnetic and would stop directing chiropractors he controlled from sending their patients to Bio-Magnetic.” (Page 10 of the affidavit)
• At a December 16, 2009, meeting, Morse demanded that Bio-Magnetic “produce abnormal results regardless of the actual condition of the patient.” (Page 12 of the affidavit)

In return for the business that he was sending to Gunabalan’s Bio-Magnetic, Morse wanted — in addition to the doctored MRI results — the following:

• To be able to underpay Gunabalan for his MRI services (Pages 5 and 6 from the affidavit).
• Donations by Gunabalan to political fund raisers and judicial campaigns when “asked” by Morse to do so. (Page 6 of the affidavit)
• A $80,000 per year job with Gunabalan’s Bio-Magnetic for Morse’s brother-in-law, who, ultimately, “did not perform any services for Bio-Magnetic …” (Pages 13-14 of the affidavit)

Michigan Attorney Grievance Commission must do its job and discipline Michigan auto accident lawyers who abuse the No-Fault insurance system

These allegations highlight the nature and extent of the destruction of ethics in the legal profession that has been allowed to occur — and will continue to occur — unless and until the Michigan Attorney Grievance Commission finally finds the will to take action against attorneys who are abusing and exploiting the No-Fault system.

This has been an open secret for at least a decade, yet the Attorney Grievance Commission has continued to turn a blind eye to this. Criminal activity that would get attorneys quickly disbarred in 49 other states has been allowed to continue in Michigan for a decade or more without so much as one single prosecution.

This latest news story is just the latest in a series of high-publicity news stories about Michigan auto accident attorney fraud and solicitation. Not only do allegations like this latest one give the entire legal profession a black eye, but they also fuel the arguments of people who want to change Michigan’s auto No-Fault system. The fraud of a small but increasing number of auto accident attorneys and doctors is leading to changes that jeopardize our entire No-Fault system, changes that will also deprive car crash victims of desperately necessary protection.

Additionally, abuse of the No-Fault system and No-Fault fraud as described in the affidavit harms everyone involved. This type of fraud has also led to the sharp increase of small No-Fault PIP lawsuits that are now clogging the courts. It also makes it easier for insurers to ignore and deny and cut off PIP benefits to car accident victims. It also results in Detroiters paying much more than they should for car insurance.