New developments re: cash-kickback scheme in class-action fraud case against KNR law firm and former doctor Sam Ghoubrial

There have been some explosive new developments in our class-action fraud case against the KNR law firm and certain of its affiliated doctors and chiropractors that warrant the public’s attention.

While the courts of appeals have affirmed class-action status for the tens of thousands of KNR clients who were charged a fraudulent “investigation fee” that the trial judge aptly described as “an ambulance-chasing fee,” we are still waiting for the appeals courts to resolve another key issue in this case: That is, whether the thousands of KNR clients who were defrauded by the firm into being overcharged for fraudulent medical care (including medically contraindicated trigger-point injections (“TPIs”)) by former doctor Sam Ghoubrial, who would fly around the state in a private plane (incredibly, called “TPI airways”) that he co-owned with KNR name-partner Rob Nestico, to “treat” the firm’s clients who were herded en masse for their injections (which Ghoubrial, according to testimony we received from his own employees in this case, would callously refer to as “afro-puncture” and “n-gg-r-point injections,” referring to the large percentage of black clients who fell victim to these practices) by chiropractors who were in on the scheme (at his deposition, Ghoubrial testified that it was OK for him to use these terms because he was of Egyptian ancestry, and therefore was “African American”). We had received tips supporting our allegations that Ghoubrial, after collecting the overcharges from the clients’ settlements, would pay cash kickbacks to Nestico and the referring chiropractors. This would allow the lawyers, doctor, and chiropractors to further conceal the fraudulent nature of their self-dealing relationships with one another, as well as the overcharges, and would also allow KNR to collect additional fees in excess of what the ethical rules governing lawyers permit.

Back in November of 2018, we filed our fifth amended complaint first setting forth these allegations about defendant’s fraudulent injection mill and the related cash kickbacks, which defendants referred to as “olives.” The information contained in this amended complaint had come to us from various witnesses, including from Dr. Richard Gunning, who was then employed by Ghoubrial, and from Ghoubrial’s now ex-wife Julie, who had reached out to us and specifically described the cash kickback scheme to us in October of 2018. After we filed this amended complaint, the defendants were apparently in a panic to discover our sources so that they could do what they could to suppress this evidence. Thus, they noticed a deposition in the then-pending divorce case between Ghoubrial and Julie, and sent a lawyer to that deposition—who was at the time representing KNR in our class-action fraud case, and purported to represent, in the divorce case, several corporations in which Ghoubrial owned a business interest (including TPI Airways)—who asked Julie specific questions about her conversations with the attorneys from our office and what she had disclosed to us, and Julie told the truth in affirming same.

Thus, we immediately moved the trial court for an order requiring the defendants to provide us with a copy of Julie’s deposition transcript, as her testimony was highly relevant and probative to our clients’ and the class-members’ fraud claims. From there, the defendants filed approximately two dozen briefs in three different courts to keep us from accessing this explosive evidence. They even went so far as to sue the trial judge for a writ of prohibition in the Ninth District Court of Appeals, claiming that he didn’t have jurisdiction to order them to produce the transcript to him for in camera review so that he could determine whether it was relevant and appropriate to produce to us in this case. Defendants’ efforts to keep the judge from reviewing the transcript eventually failed, and on March 23, 2020, a year and a half after we first moved for its disclosure, defendants finally produced it to the court for the judge’s in camera review.

By this time, the court had already granted class-action status to both classes of claims in this case, the “investigation fee” and the fraudulent medical charges, and that ruling was under appeal with the Ninth District. While we knew that Julie’s recorded testimony was highly relevant to our case, we therefore did not believe it was necessary for us to have access to it until the case came back to the trial court to adjudicate the class-action claims on the merits. Since then, however, now nearly four years later, the case has gone back up to the appeals court two more times on class-certification for the medical-fraud claims, including on the defendants’ third appeal of the issue that was filed only three weeks ago and has not yet been briefed.

That is more or less the background for the recent developments, which were set off last Monday, February 12, when the trial court issued an order stating that “The original deposition of Julie A. Ghoubrial, given on the 12th day of October, 2018 in another matter, is hereby ordered to be filed by the Summit County Clerk of Courts under seal until further order of this Court should it have any relevance to this litigation.” On the same day, the referenced transcript of Julie’s deposition was posted to the docket pursuant to the court’s order, and email notice was sent by the court’s electronic filing system, that was sent to approximately 50 parties, affiliated non-parties, corporations, and attorneys in total, including individuals, law firms, and attorneys who have no current involvement in the case. From the link provided in that email notice, anyone with access to the email could access and download a copy of the transcript. Therefore we did so, believing that the recipients of this notice would not have received access to the transcript had the judge not intended for such access to be granted, and were finally able to review the transcript’s contents to confirm whether the tips we had received were solid (which we never had reason to doubt).

As for what this transcript contains, in our professional judgment we believe it best for now to refrain from saying, which is where things get even more interesting:

After having received and reviewed the transcript, we followed up with a call to KNR’s lead attorney two days later, Weds. Feb. 14, to discuss its relevance to the parties’ relative positions in the lawsuit. A professional conversation ensued wherein KNR’s attorney advised that he would confer with his clients and get back to us in a few days. Within an hour and a half, however, Ghoubrial’s lead attorney emailed the Court to complain that we had access to the transcript, and to initiate proceedings to bar our continued possession of same.

The next day, Thurs. Feb. 15, a conference call was scheduled by the judge in which he confirmed that he did not intend for the transcript to be published to the recipients of the email notification. We argued to the judge that because we were lawfully granted access to this transcript, among many other people, including numerous non-parties to the litigation, and numerous attorneys who are not counsel of record for any of the parties to the litigation, that it would be both practically impossible and violative of our First Amendment rights to require us to destroy our copies of this transcript or otherwise pretend we did not receive it and do not know what it contains. We also urged the judge that now that we know the true evidentiary value of this transcript, that it was our right and duty to make all lawful efforts to bring it to bear on the pending claims for the benefit of the thousands of defrauded KNR clients who are putative class-members in this case. The defendants, on the other hand, urged the judge to order us to destroy our copies of the transcript, and submit affidavits to the court confirming that we had destroyed all available copies to our knowledge. Nothing was said let alone determined of the countless other persons who had access to this transcript who were not on the call, the parties argued nearly two hours about the legal issues implicated by the transcript’s release, and the call concluded.

The next day, Fri. Feb. 16, we submitted a letter to the judge citing voluminous legal authority supporting our position that the order defendants had requested on the previous day’s call would violate the First Amendment rights of Plaintiffs, their attorneys, and the public.

Later that same day, the defendants emailed the judge a proposed order and filed a motion attaching that order in which they argued that they are entitled to “prevent public dissemination” of the transcript, which, according to defendants, contains “arguably privileged and confidential information.” By their proposed order, defendants requested the following:

(1) that this transcript be “not available or accessible to anyone, including counsel;”

(2) that “all counsel are directed to refrain from distributing any copy or copies of the deposition transcript of Julie Ghoubrial to any person or entity;”

(3) that “all counsel are further directed to destroy any and all copies of the deposition transcript currently in their possession, as well as any copies in the possession of their partners, associates, agents, employees, or assigns;”

and (4) that “lead counsel for all Parties are directed to submit an affidavit to Court, no later than 3 pm est. on Wednesday, February 21, 2024, certifying that all copies of the deposition transcript of Julie Ghoubrial, including all electronic copies, have been destroyed and/or deleted.”

This Monday, Feb. 19, we filed a response in opposition to defendants’ motion in which we reiterated our position as to the unlawfulness and unconstitutionality of the order defendants had requested, attaching our Feb. 16 letter for the court record.

The next day, Feb. 20, the judge granted defendants’ requested order requiring us to destroy the transcript, and later that day placed a phone call to our office, inquiring as to whether we intended to appeal his destruction order, and informed us that if we did not intend to appeal the order that he would like to schedule another conference call with counsel for all parties about same. We then confirmed our intent to immediately appeal the order, which we did yesterday, and in doing so described it as a “gag order.” In response to this description, the judge specifically denied that he issued a “gag order” against us, thereby suggesting that he was not barring us from speaking about the transcript by his Feb. 20 order, but that he was only barring us from possessing or disseminating the transcript, which is consistent with the plain language of the order as summarized above. Yet despite the plain language of this order and the confirmation by the judge that he was not barring us from speaking about the transcript, the next day (yesterday, Feb. 21) the judge issued another order stating that “all references to the deposition transcript of Julie Ghoubrial,” and “all representations of the deposition testimony” are “ordered stricken from the record,” and that plaintiff’s opposition brief filed on Feb. 19 be “placed under seal to ensure compliance” with the Court’s February 12th order which did nothing but place the transcript on the record under seal in the first place.

Thus, at this point we are unclear as to the extent to which the trial judge intends to impose restraints on our rights to speak about what we lawfully know about this transcript and this contents, the bulk of which we knew from independent sources, years ago, before the transcript was published last week and before the court had entered any of the above-referenced orders about it.

Regardless, it remains our position that any orders barring our speech about or possession and dissemination of this transcript—which was made a public record in this case last week due to its accidental publication to the docket, and which, as we have argued since December of 2018, is highly relevant evidence of defendants’ egregious fraud against their clients, and is in no way protected from disclosure by “privilege” or any other legal doctrine— are in violation our First Amendment rights, as well as our clients,’ the thousands of putative class members, and all members of the public who have an interest in this case, and are therefore unlawful. The public has a right to this information, and our clients and the putative class-members have a right to make use of this evidence in addressing the fraud that was committed against them by lawyers, doctors, and chiropractors who abused their position of privilege and influence over them.

It is also our position that the contradictions and confusion inherent in the court’s recent orders and statements about this transcript further demonstrates both the impracticability and unconstitutionality of any orders purporting to keep this evidence a secret – of any efforts to put the toothpaste back in the tube, the cat back in the bag, the horse back in the barn, or the genie back in the bottle as various courts have stated in cases involving similar issues. We have already appealed the destruction order as of yesterday, and will continue to pursue all available means to ensure that this evidence is brought fully to bear in remedying the widespread fraud at issue here, which diminishes the entirety of the legal and medical professions in this state the longer it goes unaddressed. While progress may be slow in this regard we remain confident that it will bend toward justice.

Finally, it is also noteworthy that Ghoubrial has recently had his license to practice medicine permanently revoked by the Ohio State Medical Board due to findings of egregious sexual misconduct and assault that he committed against a nurse at a Hudson nursing home. A link to a copy of the Board’s report and recommendation revoking Ghoubrial’s medical license in the comments is available here, and a link to redacted copies of our response brief and letter to the judge referenced above is available here.

As always, stay tuned to this page for updates on further developments and feel free to contact us (peter [at] pattakoslaw [dot com]) (330.836.8533) with any information about this case, including about the alleged cash kickback scheme at issue.

—–

Update: See here for a motion we recently filed with the Court summarizing further developments in this case, including with respect to the transcript of Julie Ghoubrial’s October 2018 deposition and newly issued Court orders regarding same.

Update: The Court has granted our motion for a hearing on whether the deposition transcript of Julie Ghoubrial should be protected by privilege, and has set the hearing for June 10, 2024.