STATE OF THE CASE: OHIO RICO

CLEVELAND ATTORNEYS FACE RICO CHARGES

Cuyahoga County, Ohio | May 2022

By Brett Darken

The RICO case of Dr. Medhi Saghafi that had been dormant under the spell of Covid, is now awake in the courts of Cuyahoga county (Cleveland) Ohio.

The “State of the Case” series gives readers an inside look at fraud and corruption cases in state and local courts across the country. Fraud investigations are often private internal events, silenced by NDA’s, or sealed by judges. But cases filed in courts are open to the public and are a great source of knowledge. The Saghafi case covers nearly ten years of legal and financial events that are open to the public because they’re in court. 

GUARDIANSHIPS—DEMENTIA—BRITTANY SPEARS

Judge James Walther Loraine county, Ohio

The Ohio RICO suit was originally filed in 2019 by attorney Charles Longo on behalf of Dr. Medhi Saghafi. The case centers on a “guardianship” ordered by the court. This is where a judge rules that a person is unable care for their own affairs. In guardianships, the judge orders an independent “guardian” (or conservator) to oversee and “look out for” the well-being of the person who can’t care for themselves.

Guardianships frequently involve the elderly who have some form of dementia, but it is a guardianship that is at the center of the Brittany Spears case in Los Angeles.

In the Ohio RICO case the attorneys and other professionals placed in charge by the court are accused of tagging their “clients” or “wards” with excessive billing, fees and expenses.

THE “PREDICATE FRAUD”

There is a difference between a simple, common fraud, and a racket. Rackets are crimes (or frauds) done by more than one person using an organization or enterprise. This “enterprise” could be a business, church, school, union, club and of course, a gang.

Since RICO cases typically involve a web of people involved in a criminal organization, and it can be easy to see the links between members of the “enterprise.” But just because people are part of an enterprise or organization doesn’t mean they’re doing something criminal.

To bring a successful RICO case requires that one find the core crime (or fraud) that the members are doing: The “predicate” crime. The first step in building a successful RICO case is establishing the one or two “predicate” frauds or crimes: The fraud that is central to the organization, and from which people profit.

People who are targets of fraud will often know or have a “sixth sense” that there is “something wrong” in a situation. That instinct or awareness that something “doesn’t add up” is called a red flag. The red flag is the trigger that makes us take a closer look at the details. 

FIGHTING THE FOG OF WAR

But in fraud cases, details are often hard to nail down. Fraud is a crime of deception it thrives where there is confusion, chaos and fear. 

To get clarity there are three simple questions to ask:

  • “What was the first, or the main thing, that went wrong?”
  • “Who made it go wrong?”
  • “Who is profiting from the confusing, bad, or corrupt event?”

The answers to these questions will likely bring into focus the essence of the issue: “The predicate fraud.” 

The Saghafi case is an example of defining the predicate fraud:  The suit is more than 50 pages long, and names nearly a dozen defendants, but the heart of the complaint is that Dr. Saghafi’s wife, a dementia patient, was trapped in a court-ordered guardianship that was unneeded and unwanted. It was unneeded and unwanted because the patient’s husband, Dr. Medhi Saghafi (and his family) was qualified and wanted to provide the care needed by his wife.

But the court denied Dr. Saghafi the right to provide that care. Instead, Ohio Judge James Walther gave the defendants her oversight. Then, once the court awarded the defendants “guardianship” they proceeded to bill the woman’s estate hundreds of thousands of dollars for her “care.”

The court let financial predators target a dementia patient for services that were not needed or wanted. The core frauds or “predicate” of the case is billing fraud run inside a labor racket. While there are more than one hundred specific details sited in Longo’s RICO suit, nearly all of those details can be linked to those simple, basic,“predicate” frauds. 

While Mrs. Saghafi is a half century older than Brittany Spears, her Ohio case parallels the complaints coming from the Spears guardianship. In both cases, the women needed extra “care” or “supervision”—so that is not in dispute. The complaint in both cases is that the professionals who delivered that “court ordered care” were actually financial predators who billed their clients for for services that  were unneeded, unwanted, redundant or at inflated rates.

A COURT-ENFORCED RACKET?

Rackets happened every day from drug cartels to oil change shops. What makes the Ohio case unique is that if true, the racket was known by many officers of the court, approved by judges, and upheld by Ohio’s appeals-court. So is the court of Ohio actually complicit in a labor racket? It will be up to the jury to decide. A trial date has yet to be set.

NEXT UP:

In the next “State of the Case” from Ohio, we’ll break down one tiny exchange in the “discovery” process. In it, Ohio Judge Walthers goes to court to squash a subpoena from attorney Longo that simply asked for the notes of county investigator Paula Strickler. It will show how a detailed and disciplined inquiry into an event can help a legal team unlock hidden facts in a case.

About the author: Brett Darken writes about finance, family and fraud for the ACFE. He has been licensed in securities, insurance and real estate, and serves as a trustee for those who have been targeted by financial predators. 

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Volunteers working to help people spot, stop and recover from fraud and corruption in probate, trusts, estates & guardianships.