News and Press Releases

United States Attorney Jenny A. Durkan
Western District of Washington

Lakewood Oncologist To Pay $3.1 Million To Settle Health Care Fraud Claims

Dr. Alfred Chan and Judy Chan Overbilled Federal Healthcare Programs for
Cancer Treatment Drugs

June 20, 2013

Dr. Alfred H. Chan, an oncologist in Lakewood, Washington, and his family, have agreed to pay the United States $3.1 million to settle allegations that he and his wife defrauded federal health care programs by significantly and repeatedly overbilling for cancer treatment medications.  From at least April 2006 through April 2009, the government contends that Dr. Chan and his wife Judy Chan intentionally inflated claims to Medicare, TRICARE, and other federal health care programs, resulting in a loss to the government estimated at over $1 million.  Today’s settlement represents a recovery of almost three times the estimated loss to federal health care programs.

             “Dr. Chan and Judy Chan blatantly and persistently defrauded the government of more than a million dollars and traded the safety of cancer patients for their own personal gain,” said U.S. Attorney Jenny A. Durkan. “They continue to try to avoid criminal sanctions by remaining outside the U.S.  This civil settlement recoups the financial damage they inflicted on taxpayer funded programs.”

            The government was alerted to the Chans’ fraud through a “qui tam” or “whistleblower” lawsuit brought under the False Claims Act by one of Dr. Chan’s former employees, Ruth Ruckman.  Ms. Ruckman observed that Dr. Chan – with the assistance of his wife, Judy – routinely billed federal healthcare programs for twice (or more) the amount of cancer treatment drugs actually administered to his patients.  The couple then destroyed records and falsified patients’ medical records in order to conceal the fraud.  Ms. Ruckman provided the government with Dr. Chan’s treatment orders, which showed the actual dosages of drugs administered to certain patients, and the invoices, which showed how much Dr. Chan overbilled for the treatments.   

            Upon learning of the government’s investigation, the Chans attempted to sell, transfer, and conceal millions of dollars in assets in an ultimately unsuccessful attempt to prevent the government from recovering its overpayments.  In February 2011, the Chans fled to Taiwan.  A grand jury sitting in the Western District of Washington has returned a criminal indictment against Alfred and Judy Chan relating to their fraudulent conduct.     

            Pursuant to the False Claims Act, Ms. Ruckman is entitled to share in the government’s recovery and will receive $620,000 of the $3.1 million settlement for exposing the Chans’ fraudulent conduct.        

            Government agencies supporting and/or participating in the successful resolution of this matter include: the Office of Inspector General of the Department of Health and Human Services; the Department of Defense Office of Inspector General, Defense Criminal Investigative Service; the Office of Inspector General of the Office of Personnel Management; the TRICARE Management Activity Office of General Counsel; the Washington State Health Care Authority; and the Washington State Attorney General’s Office.


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