Acting Assistant Attorney General Nicole M. Argentieri Delivers Keynote Address at the 40th International Conference on the Foreign Corrupt Practices Act
An indictment was unsealed today charging two individuals with leading a multi-million dollar health care fraud and tax evasion scheme.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; U.S. Attorney Dana J. Boente for the Eastern District of Virginia; Assistant Director in Charge Andrew W. Vale of the FBI’s Washington Field Office; Special Agent in Charge Kimberly Lappin , of Internal Revenue Service Criminal Investigation (IRS-CI) Washington D.C. Field Office; Special Agent in Charge Robert E. Craig for the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office; Special Agent in Charge Nicholas DiGiulio of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) and Acting Inspector General Norbert E. Vint for the Office of Personnel Management (OPM) made the announcement after the indictment was unsealed.
Young Yi, 44, a citizen of South Korea, and Dannie Ahn, 43, of Centreville, Virginia, were charged in an indictment filed in the Eastern District of Virginia with one count of conspiracy to commit health care fraud and wire fraud, six counts of health care fraud, and one count of conspiracy to defraud the United States. Yi was also charged with one count of filing a false tax return.
As set forth in the indictment, from at least 2005 through 2014, Yi owned, operated and controlled various corporations, to include 1st Class Sleep Diagnostic Center and 1st Class Medical, which provided sleep studies and sleep-related treatment at clinics located throughout Northern Virginia and Maryland. Ahn helped control, manage and oversee Yi’s various corporations.
According to allegations in the indictment, Yi and Ahn directed a scheme that caused approximately $200 million in health insurance claims to be submitted for reimbursement that were, in part, based on false statements to health care benefit programs. In particular, the indictment alleges that Yi and Ahn fraudulently incentivized individuals to undergo repeat and medically unnecessary sleep studies, falsified insurance claims, and used the identities of physicians without their authorization to bill health care benefit programs for sleep studies.
The indictment alleges that Yi and Ahn similarly caused the creation of various shell companies to acquire, hold and move proceeds derived from the scheme. Yi and Ahn then used the proceeds to purchase expensive vehicles, luxury clothing, exotic vacations and exclusive real estate, including but not limited to, luxury condominiums in Hawaii and Chicago, and a tract of land in the Hidden Springs neighborhood of Great Falls, Virginia, in order to construct “Le Chateau de Lumiere,” a multi-million dollar and approximately 25,000-square-foot home modeled after the Palace of Versailles.
The indictment further alleges that Yi and Ahn falsified the financial books and records of 1st Class Sleep Diagnostic Center by misclassifying various personal expenses as business expenses in order to reduce taxable income. According to the allegations, Yi and Ahn then provided the falsified records to an independent tax preparer, who in turn relied on those records to prepare and file corporate and individual tax returns.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI’s Washington Field Office and the IRS-Criminal Investigation’s Washington Field Office. Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Katherine Wong of the Eastern District of Virginia are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.