By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law
On June 9, 2017, a jury in Illinois awarded a Chicago-area anesthesiologist nearly $4.4 million. The jury unanimously agreed that his business associate defrauded him on a revenue sharing agreement and fraudulently reported his earnings to the Internal Revenue Service (IRS).
The jury found that Dr. Martin R. Hall, owner of Keystone Orthopedic Specialists SC (Keystone), stuck Dr. Nicholas Angelopoulos with unwarranted expenses throughout the course of their business dealings. The jury ultimately agreed in favor of Dr. Angelopoulos on all five counts, including two breach of contract counts, breach of fiduciary duty, fraud and violation of IRS code.
A Sour Business Deal.
According to Dr. Angelopoulos, when he began to question Dr. Hall’s business expenditures, Dr. Hall would not provide sufficient documentation for the purchases. Dr. Angelopoulos also claimed he was not receiving credit for all of his billings. Additionally, over the course of their three-year working relationship, Dr. Angelopoulos claimed that Dr. Hall made payments to his family members, including his wife and his sister, without disclosing it to the other business associates.
In 2008 after Dr. Angelopoulos left Keystone, Dr. Hall came to him with a hand-written tabulation of more than $150,000 Dr. Angelopoulos allegedly owed to Keystone. Dr. Angelopoulos rejected the amount saying it was false.
Fraudulent Reports to the IRS.
In response to the rejection, Dr. Hall then allegedly reported a payment of $159,577.45 to Dr. Angelopoulos in tax documents filed with the IRS. Dr. Hall claimed that it was for the alleged outstanding debt plus an alleged bonus, which Dr. Angelopoulos claimed he never received, according to court documents. Because of this, in 2011 the IRS came after Dr. Angelopoulos for taxes on Dr. Hall’s reported payment, settling the taxable amount at about $120,000.
In the end, jurors agreed with Dr. Angelopoulos that these numbers were inaccurately reported by Dr. Hill in the first place. Additionally, the jury rejected Dr. Hall’s counterclaim arguing that Dr. Angelopoulos still owed him the money.
To view the court document’s in this case, click here.
To read an article I wrote on how to prevent employee embezzlement which was featured in Medical Economics, click here.
To learn more about complex business litigation and examples of how The Health Law Firm can help you, click here.
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Simpson, Dave. “Jury Awards $4.4M To Doc Defrauded By Associate.” Law360. (June 7, 2017). Web.
About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.
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