United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Johnson Coleman United States District Judge.
Stop Illinois Health Care Fraud, LLC brought this qui
tam case pursuant to the False Claims Act, 31 U.S.C.
§§ 3729, et seq. The plaintiff alleges
that defendants violated the Anti-Kickback Statute, 42 U.S.C.
§ 1320a-7b, the False Claims Act, and the Illinois False
Claims Act, 740 ILCS 175/1, et seq. The United
States and the State of Illinois did not intervene in the
action, and plaintiff filed its Third Amended Complaint on
September 22, 2016. (Dkt. 82.) Plaintiff alleges that the
defendants paid a community care organization, Healthcare
Consortium of Illinois (“HCI”), to give
defendants information on clients that HCI had evaluated for
eligibility for programs by the Illinois Department of Aging,
so that defendants could then market Medicare reimbursed
healthcare services to those clients.
the Court was prepared to proceed, on the morning a jury
trial was set to begin, due to the unavailability of
plaintiff Relator John Mininno the parties opted to proceed
with a bench trial. The Court held a bench trial on July
22-24, 2019. After plaintiff presented its case in chief
before the Court, defendants filed a motion for a directed
finding on all claims, arguing that plaintiff failed to
satisfy a prima facie case of an Anti-Kickback Statute
violation. (Dkt. 212.) The Court heard oral argument on
defendants' motion on July 25, 2019. For the following
reasons, defendants' motion is granted.
following constitutes the Court's findings of fact
pursuant to Rule 52(a) of the Federal Rules of Civil
Asif Sayeed wholly owns the defendant Management Principals,
Inc. (“MPI”). MPI arranges medical referrals to
other entities and advertises itself as a “one stop
shop, ” managing a variety of healthcare companies,
including the defendants Vital Home & Healthcare, Inc.
(“Vital Home”) and Physician Care Services, S.C.
a non-governmental organization that coordinated services for
low-income seniors. The primary function of HCI's senior
program included sending case managers (later referred to as
care coordinators) to meet with senior clients and survey
their needs for access to a range of community offerings,
such as “Meals on Wheels” and medical services,
that would enable the seniors to remain in their own housing
longer. HCI referred clients who needed and desired in-home
healthcare to MCI on a rotating basis.
MCI entered into a management services agreement effective
December 1, 2010. HCI's attorney Robert Spadoni primarily
drafted and made revisions to the agreement, which Sayeed
negotiated with Spadoni. HCI's Chief Program Officer at
that time, Ella Grays, was also aware of the discussions.
Pursuant to the agreement, MPI paid HCI $5, 000 monthly for
the 18-month length of the agreement in exchange for
HCI's administrative advice and counsel. Sayeed testified
that he discussed MPI's datamining objectives with
Spadoni and Grays, whom confirmed that there were no issues.
Grays testified that she knew it was not proper to get
anything of value in exchange for referring a patient to a
service or an agency and that in all the years that she was
at HCI she had no knowledge that anyone had ever taken
anything of value in exchange for a referral, including from
MPI or Vital Health. Relator John Mininno testified that
the payments made under the agreement represented some kind
of kickback, without offering specifics as to what
represented a kickback and how the practice was improper.
Piwowarski, whose video deposition plaintiff played in court,
worked for Vital Health from approximately 2005 to 2011. She
testified that she had been trained and understood that items
of value could not be given to a client in exchange for
referrals or other improper purpose. Piwowarski also
testified that she did not have any knowledge that defendants
had ever paid any money or offered another item of value in
exchange for patient referrals. While working for Vital
Health, Piwowarski became friendly with several of HCI's
staff members that she frequently saw. For special occasions,
such as a birthday or shower, she would give an HCI employee
a $5 or $10 gift card for Dunkin' Donuts. Piwowarski
testified that she never did so with the expectation of
receiving a referral from HCI and that Sayeed or another
defendant never asked her to give anything of value in order
to obtain referrals from HCI.
Cutright (also known as Rosetta Cutright Woods) worked at MPI
for about a year in 2012 and then at HCI from approximately
2013 to November 2018. Cutright testified that while she
worked at HCI, the agency used a rotation list to assign
referrals, such that each agency that qualified for the
referral would receive a distribution of the referrals.
Cutright testified that when she was a caseworker at HCI no
one from MPI or any of Sayeed's companies offered her
anything of value in exchange for a referral, and she never
heard of anyone at HCI being offered something of value from
any of Sayeed's companies. Moreover, when MPI employed
Cutright, she never heard of anyone at MPI giving something
of value to an HCI caseworker for a referral.
the Court held a bench trial, the Court construes
defendants' motion as a Rule 52(c) motion for judgment on
partial findings, rather than as a motion for a directed
verdict. See Fed. R. Civ. P. 52(c). Pursuant to Rule
52(c), if a party has been fully heard on an issue during a
bench trial and the Court finds against the party on that
issue, the Court may enter judgment against the party on a
claim that can be maintained “only with a favorable
finding on that issue.” Fed.R.Civ.P. 52(c). On a Rule
52(c) motion, the Court is “acting in the capacity of a
finder of fact, weighing evidence and assessing the
credibility of the witnesses.” Pinkston v.
Madry, 440 F.3d 879, 890 (7th Cir. 2006). Judgment on
partial findings should be granted only if the Court could
only find against the party. See Wilborn v. Ealey,
881 F.3d 998, 1008 (7th Cir. 2018).
following constitutes the Court's conclusions of law
pursuant to Rule 52(a) of the ...