Former clients of KNR law firm move for class-action certification based on detailed evidence of a widespread scheme to defraud

Yesterday, four former clients of the law firm Kisling Nestico & Redick (“KNR”) who have sued the firm, its owners, and two related healthcare providers for fraud, filed a motion requesting that the court certify the case as a class-action, allowing thousands of the firm’s former clients who were affected by three allegedly fraudulent schemes to recover in the same lawsuit.

The Plaintiffs’ motion is based on a detailed summary of evidence obtained in discovery, including sworn testimony from current and former KNR attorneys and numerous internal firm communications and client files. This evidence shows that the KNR firm uses a high-volume, high-advertising business model to systematically take advantage of its clients by,

  1. directing them to treat with the firm’s “preferred” healthcare providers who require the clients to unwittingly waive their own health-insurance benefits and then charge the clients exorbitant rates for fraudulent care—including medically contraindicated “trigger-point injections”—allowing the firm to inflate its attorneys’ fees with a minimum of effort;
  2. charging the clients fees for worthless “narrative reports” that function as a kickback to chiropractors who refer the firm clients and participate in its price-gouging scheme; and
  3. charging the clients a bogus “investigation” fee on every case, to pay so-called “investigators” whose primary job was to chase new clients down to sign them up before they could sign with a competing firm.

One doctor alone, Defendant Sam Ghoubrial, M.D.—who also owns and operates Wadsworth’s largest primary care practice—has collected nearly $8 million from KNR client settlements since approximately 2011, flying across Ohio in a private plane to administer allegedly fraudulent injections to KNR clients en masse at designated chiropractors’ offices. Ghoubrial directly charges the clients between $400 and $1,000 for each round of injections, up to ten times more than prevailing insurance rates, and also charges the clients between $500 to $1,500 for medical supplies that are readily available for purchase from alternative sources for $30 to $100.

The evidence further shows that Ghoubrial’s intent was to administer as many of the overpriced injections as possible, regardless of client wants or needs. Employees of Ghoubrial’s so-called “personal-injury clinic” have testified that Ghoubrial would exclude them from treating patients in the clinic if they didn’t administer enough of the injections, and that patients would complain that “they didn’t want shots and the next thing they knew they were getting a shot.”

Former KNR attorneys similarly testified that they were directed by firm management to send their clients to Ghoubrial, despite constant complaints about his practices, precisely “because he charges a lot more for the treatment.” And when the firm’s rank-and-file lawyers complained to management that the involvement of Ghoubrial and the firm’s other “preferred” providers was actually damaging the clients’ cases, because insurance adjusters viewed this treatment as fraudulent, management disregarded these complaints and refused to alter its relationship with the providers.

As one scholar has explained, “[i]t is financially more profitable to handle a mass of small claims with a minimum expenditure of time on each than it is to treat each as a unique case and fight for each dollar of the maximum possible recovery for the client.” The firm’s attorneys understood that this was precisely KNR’s business model, and that anyone who questioned it would be subject to harsh discipline, including termination.

The Plaintiffs’ motion for class-action certification, containing a full account of the evidence of the fraudulent schemes, is available here. A copy of the exhibits referenced in the motion—including deposition testimony, internal KNR communications, and affidavits from former KNR clients, KNR attorneys, and five expert witnesses whose testimony supports Plaintiffs’ claims—is available here.

The case, captioned Member Williams et al., v. Kisling, Nestico & Redick, LLC, et al., is currently pending in the Summit County Court of Common Pleas, Case No. 2016-CV-09-3928, with Judge James A. Brogan presiding. The Plaintiffs are represented by attorneys Peter Pattakos and Rachel Hazelet of the Pattakos Law Firm in Fairlawn, Ohio, and Joshua Cohen and Ellen Kramer of Cohen Rosenthal & Kramer in Cleveland.