PEOPLE OF MI V MOHAMMAD VAKILIAN MDAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
PEOPLE OF THE STATE OF MICHIGAN,
December 29, 1998
LC No. 97-502381
MOHAMMAD VAKILIAN, M.D.,
Before: Smolenski, P.J., and McDonald and Doctoroff, JJ.
The prosecution appeals as of right an order quashing the information and dismissing the charges
of violating and conspiring to violate the kickback provisions of the Medicaid False Claims Act, MCL
400.604; MSA 16.614(4), and the Health Care False Claims Act, MCL 752.1004; MSA
28.547(104), against defendant, Mohammad Vakilian, M.D. We affirm.
Defendant was an employee of Health Stop Medical Centers (hereinafter, "Health Stop").
Health Stop had its own laboratory and many medical tests for its patients were done "in-house." At the
time of the preliminary examination, the prosecution presented evidence that defendant's monthly
bonuses were calculated based upon the number of medical tests ordered for his patients. In essence,
the prosecution contended that defendant received a kickback for ordering various tests covered by
Medicare and/or other health insurance. The district court bound defendant over on a total of twelve
counts of violating and conspiring to violate the kickback provisions of the MFCA and the HCFCA.
The MFCA, which is substantially similar to the HCFCA, provides:
A person who solicits, offers, or receives a kickback or bribe in connection with the
furnishing of goods or services for which payment is or may be made in whole or in part
pursuant to a program established under Act No. 280 of the Public Acts of 1939,
[footnote omitted] as amended, who makes or receives the payment, or who receives a
rebate of a fee or charge for referring an individual to another person for the furnishing
of the goods and services is guilty of a felony, punishable by imprisonment for not more
than 4 years, or by a fine of not more than $30,000.00, or both. [MCL 400.604; MSA
The circuit court quashed the information based upon a finding that the prosecution failed to present
evidence that defendant intended to receive a kickback.
The district court must bind the defendant over for trial if it finds probable cause to believe that
the defendant committed the crime. People v Orzame, 224 Mich App 551, 558; 570 NW2d 118
(1997). Probable cause exists where the court finds a reasonable ground of suspicion, supported by
circumstances sufficiently strong in themselves to warrant a cautious person to believe that the accused
is guilty of the offense charged. Id. To establish that a crime has been committed, the prosecution need
not prove each element of the crime beyond a reasonable doubt, but there must be some evidence from
which each element of the crime may be inferred. People v Reigle, 223 Mich App 34, 37; 566 NW2d
21 (1997). The requisite intent of MFCA § 4 and HCFCA § 4 is the intent to do the prohibited act, in
this case receiving a kickback. People v Motor City Hospital and Surgical Supply, Inc, 227 Mich
App 209, 215; 575 NW2d 95 (1997). Accordingly, the prosecution had to present some evidence
that defendant intended to receive a kickback when he received his monthly bonuses.
We find that there was no evidence that defendant knew there was a correlation between his
monthly bonuses and the number of tests he ordered; therefore, it would be impossible to show that
defendant intended to receive a kickback. Put another way, defendant could not intend to receive a
kickback unless he knew that his monthly check was just that. To hold otherwise would amount to a
ruling that the MFCA and the HCFCA are strict liability crimes. Id. at 216.
The prosecution admits it was required to present some evidence that defendant knew that what
he was receiving was a kickback. It argues this burden was satisfied by circumstantial evidence, i.e.,
evidence that the amount of the bonus check varied based upon the number of tests ordered permits an
inference of knowledge. We disagree.
There was nothing in defendant’s employment contract outlining the manner in which bonuses
would be calculated. Those in charge of calculating the monthly bonuses never discussed with any
doctor Health Stop’s methodology. In fact, this information was kept highly confidential. Federal and
state investigators candidly admitted there was no direct evidence establishing defendant’s knowledge.
The investigators also testified that at least one doctor, who was not charged, believed that her bonuses
were based upon overtime hours.
In addition, the evidence belies the prosecution’s assertion that defendant should have discerned
that his bonuses were based upon the number of tests ordered because the amount of the bonus check
directly correlated with the number of tests ordered. Health Stop’s procedures were not as simplistic as
the prosecution asserts.
During each month, Health Stop tracked the number of times each doctor ordered tests from a
list of twenty-nine procedures. An administrative assistant testified she used a reference sheet that set
forth the assigned dollar value for each procedure. She then multiplied the number of procedures a
doctor ordered in a month by that dollar amount. However, after that was done, another employee,
apparently depending upon the amount of the total bonus, would reduce the bonus anywhere from fifty
dollars to a few hundred dollars. Thus, the bonuses did not necessarily correspond exactly with the
number of tests ordered.
Other factors employed by Health Stop in calculating the bonuses would similarly have made it
difficult for a doctor to discover the clinic’s methodology. Each of the twenty-nine tests tracked
monthly were assigned a different dollar value. However, even the same test could be assigned a
different value depending upon how the test was billed. Considering the formula used, it would be
difficult for a doctor to discern a pattern.
The prosecution’s theory that defendant had enough information to draw conclusions about the
way his bonus was calculated presumes that defendant engaged in rather unlikely behavior. Under the
prosecution’s theory, defendant would have been required to keep track of the number of tests he
ordered, so that he could make a comparison from month to month, and then be in a position to
conclude that a correlation existed. He would have been required to do the same thing for his over-time
hours so that he could rule this out as a factor affecting his bonus. Finally, he would also have to make
certain correct assumptions regarding the dollar value Health Stop placed on each procedure and the
dollar amount bonuses would be reduced by the office administrator. Frankly, the prosecution’s
argument imputes behavior upon defendant that we find to be unrealistic.
Additionally, a review of the bonus amounts defendant received shows that they varied from
month to month. This pattern, or more aptly put, lack of pattern, does not support an inference that
defendant knew his bonuses were related to the number of tests he ordered. Moreover, both
investigators testified there was no evidence that defendant ordered unnecessary tests.
Based on this lack of evidence, we find that the district court abused its discretion in binding
defendant over for trial. Orzame, supra at 557. Accordingly, the circuit court properly quashed the
/s/ Michael R. Smolenski
/s/ Gary R. McDonald
/s/ Martin M. Doctoroff