California Clinic Owner Sentenced to 63 Months in Prison for Role in Occupational Therapy Fraud Scheme
A rehabilitation clinic operator in Los Angeles County was sentenced to 63 months in prison today for his role in a $3.4 million Medicare fraud scheme that involved billing for occupational therapy services that were not medically necessary and not provided.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney Eillen M. Decker of the Central District of California and Special Agent in Charge Christian J. Schrank of the U.S. Department of Health and Human Services’ Office of Inspector General’s (HHS-OIG) Los Angeles Regional Office made the announcement.
Simon Hong, 55, of Brea, California, was sentenced by U.S. District Judge George H. Wu of the Central District of California. Judge Wu also ordered Hong to pay $2,407,857 in restitution. Hong pleaded guilty on Dec. 15, 2016, to one count of conspiracy to commit health care fraud.
As part of that guilty plea, Hong admitted that he owned JH Physical Therapy Inc., an occupational therapy clinic in Walnut, California, but hid his ownership in the name of a “straw”or nominee owner in an effort to execute and conceal the fraudulent scheme. Hong admitted that as part of the scheme, he billed Medicare for occupational therapy services when no such services were provided to the Medicare beneficiaries. Instead, the Medicare beneficiaries received acupuncture and massage services, which were not reimbursable by Medicare. Hong further admitted that he directed co-conspirator therapists to falsify medical records to make it appear as if the services billed had been actually provided and funneled 87 percent of the proceeds from Medicare to himself.
Through this scheme, Hong admitted that he and his co-conspirators billed Medicare approximately $3,454,485 from October 2009 until December 2012 in false claims and received approximately $2,407,857.
Hong was charged by indictment on June 16, 2016, along with Grace Hong, 51, of Brea, and Keith Canlapan, 38, of West Covina, California. Canlapan pleaded guilty to one count of conspiring to commit health care fraud, and Grace Hong is scheduled for trial March 21, 2017. An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
In a separate case, Hong was convicted by a jury in October 2016 of eight counts of health care fraud, nine counts of illegal health care kickbacks and two counts of aggravated identity theft, involving a scheme to bill Medicare for physical therapy services that were never provided to beneficiaries. On Jan. 10, 2017, Hong was sentenced in that case by U.S. District Judge David O. Carter of the Central District of California to 121 months in federal prison and remanded into custody. The 63-month sentence imposed by Judge Wu will run concurrently to the sentence imposed by Judge Carter.
HHS-OIG investigated the case. The Criminal Division’s Fraud Section Trial Attorney Niall M. O’Donnell and Former Fraud Section Trial Attorney Blanca Quintero prosecuted the case.