Judge calls attorney Mike Morse a 'co-conspirator' in alleged fraud scheme
Detroit — Evidence presented in a civil lawsuit suggests high-profile lawyer Mike Morse is at the center of an alleged conspiracy that an insurance company claims involved unnecessary medical treatments and millions in kickbacks, a federal magistrate judge said Tuesday.
U.S. Magistrate Judge Anthony Patti concluded from the evidence that Morse was an "unnamed co-conspirator" and said the prominent personal injury lawyer is "at the very center of this scheme," which is being alleged by State Farm Mutual Automobile Insurance Co. and investigated by federal agents during a widespread criminal probe that has led to charges against at least four people, including his college friend.
Patti issued his opinion in a civil lawsuit filed by State Farm and ordered Morse, who is not a party in that suit, to produce evidence sought by a subpoena. The lawsuit has been notable for its insights into the ongoing criminal investigation.
"It can also reasonably be inferred from this evidence that Morse is at the very center of this scheme ...." Patti wrote. "He does appear to be, for all intents and purposes on these pleadings and on this record, the epitome of the 'unnamed co-conspirator.'
"Clearly, in light of the record as now presented by State Farm, the 'PI Attorney' referenced in the complaint, as what can best be characterized as an 'unnamed co-conspirator' in the alleged fraudulent scheme, is Morse," the magistrate judge added.
Patti filed a 45-page opinion and order Tuesday requiring Morse to produce documents sought by State Farm that could shed light on the scheme.
"The magistrate’s decision was contrary to a host of well-settled legal principles and Mike Morse intends to appeal and obtain its reversal," his civil lawyer, I.W. Winsten wrote in an email to The Detroit News on Wednesday. "Mike Morse did nothing wrong and that is why he has not been named ... as a defendant in this case."
Morse, 51, a well-known personal-injury lawyer due to his Southfield firm’s television commercials and roadside billboards, has not been charged with a crime during the ongoing criminal investigation.
Amid the federal investigation, Morse has hired a criminal defense team that includes Ann Arbor lawyer John Shea and Washington, D.C., white-collar attorney Henry Asbill. Shea defended Kwame Kilpatrick’s father, Bernard Kilpatrick, in the Detroit City Hall corruption scandal while Asbill has represented several high-profile clients, including the estate of Michael Jackson and former Virginia Gov. Robert McDonnell.
Tuesday's filing comes eight months after The News reported that Morse's sexologist sister received immunity from prosecution and testified before a federal grand jury investigating ties between the high-profile lawyer's firm and improperly obtained police reports.
Federal prosecutors identified Emily Morse as a target of the criminal investigation last year and wrote that they had substantial evidence she participated in a money-laundering scheme and conspired to defraud the IRS, sources told The News.
Emily Morse, 49, is a Los Angeles actress, reality-show star and satellite radio host who gives relationship advice on the "Sex With Emily" podcast.
The alleged conspiracy being investigated by federal agents involves bribed Detroit police officers selling unauthorized accident reports that flowed to Morse's firm, according to civil lawsuits that involve some of the same allegations, people and companies as the federal criminal probe. The civil suits accuse Morse's firm of using the illegally obtained reports to try to sign clients and refer crash victims to physical therapy clinics — in exchange for money.
Morse did not improperly receive the police reports, his lawyer has said.
"Michael Morse and his law firm are not a party to any legal action which asserts that either of them improperly obtained police reports," Morse's lawyer previously told The News. "The reason is simple. They did not."
The investigation has involved Mike Morse's friends and family. In December, prosecutors charged Morse's college friend, Bloomfield Hills physical therapy center owner Jayson Rosett, and two former Detroit Police officers with tax conspiracy.
"Let’s do the police report thing," Morse wrote in an August 2011 email to Rosett, according to the magistrate's opinion Tuesday. "Just get them to me and I will get you more active treating patients. It will work.”
The conspiracy dates to 2012, lasted until April 2018 and involved Rosett and others paying more than $375,000 to obtain police reports from two Detroit Police personnel, federal authorities allege. Rosett and his father hid the payments from the Internal Revenue Services through a series of entities, according to the government.
Rosett pleaded guilty to a conspiracy charge in May and will be sentenced in October.
The unauthorized police reports factored into Patti's opinion Tuesday.
"According to State Farm, obtaining these unapproved police reports gave Morse, Rosett and (others) a competitive edge because they then had access to this accident information and potential clients before it was available to anyone else," Patti wrote Tuesday.
The State Farm lawsuit alleges Morse "played a critical role in facilitating the success of the (defendants’) fraud scheme and received substantial financial benefits...," the insurance company's lawyer wrote in an earlier court filing.
The financial benefits included $550,000 to buy property for an addition on Morse's house and $100,000 to an entity that owns Morse’s private jet, according to the civil lawsuit.
In the State Farm lawsuit, Rosett's lawyer filed a photo of a duffel bag delivered to Morse's home in Huntington Woods last year and said it was filled with cash.
There is no evidence Morse knew about Rosett’s activities, Morse's lawyer has told The News.
The magistrate judge on Tuesday said Morse failed to show a subpoena issued by State Farm was brought for an improper purpose “particularly in light of the substantial record evidence developed by State Farm in this case.”
Patti ordered Morse to respond to State Farm’s specific document requests, except for those involving a “sister company” the judge said the firm “failed to sufficiently tie … to Morse and the alleged fraudulent scheme in this case.”