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Justice News

Department of Justice
U.S. Attorney’s Office
Central District of California

FOR IMMEDIATE RELEASE
Monday, March 6, 2017

Orange County Man Who Owned Rehab Clinic in Walnut Sentenced to 63 Months in Federal Prison for Role in Occupational Therapy Fraud Scheme

          LOS ANGELES – The operator of rehabilitation clinic in Walnut was sentenced today to 63 months in prison 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.

          Simon Hong, 55, of Brea, was sentenced by U.S. District Judge George H. Wu, who also ordered the defendant to pay $2,407,857 in restitution. Hong pleaded guilty on December 15 to one count of conspiracy to commit health care fraud.

          Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, United States Attorney Eileen M. Decker 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.

          “This defendant has now been convicted and sentenced to federal prison in two separate schemes that cost taxpayers millions of dollars,” said United States Attorney Decker. “This type of fraudulent conduct is a burden on the entire health care system, drives up costs for patients and compromises the delivery of services to people who legitimately need care.”

          In addition to today’s sentence, Hong was sentenced in January to over 10 years in prison in a separate case. The 63-month sentence imposed today by Judge Wu will run concurrently to the sentence imposed by Judge Carter.

          As part of the guilty plea that led to today’s sentencing, Hong admitted that he owned JH Physical Therapy Inc., an occupational therapy clinic in Walnut, 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. Canlapan pleaded guilty to one count of conspiring to commit health care fraud, and Grace Hong is scheduled for trial March 21. 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.

          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.

Press Release Number: 
17-044
Updated March 6, 2017