Sacramento, Calif. — A federal jury has convicted Anthony Lazzarino, 68, the former Chief of Podiatry at the Veterans Affairs’ Northern California Health Care System, and Peter Wong, 61, founder and CEO of Sunrise Shoes and Pedorthic Service Corporation, on charges of health care fraud and conspiracy to commit wire fraud. The verdict, delivered after a weeks-long trial, exposes a years-long scheme that exploited vulnerable veterans for profit.
Between March 2008 and February 2015, Lazzarino and Wong systematically billed the VA for custom orthopedic footwear that was never fully manufactured or delivered as prescribed. Prosecutors revealed that while veterans were diagnosed and fitted for specialized shoes, the final products often lacked required modifications — rendering them medically useless. The pair pocketed hundreds of thousands in payments for services not rendered, all while veterans suffered untreated foot conditions.
Even more brazen, Lazzarino, Wong, and co-conspirator Jai Aing Chen — who pleaded guilty in December 6, 2016 — lied about where the shoes were made. They falsely claimed the footwear was produced domestically to qualify for a lucrative VA national contract worth over $11 million per year. The contract was won on false pretenses, investigators say, with manufacturing outsourced overseas to cut costs and boost profit.
The fraud unraveled through a joint investigation led by the Department of Veterans Affairs Office of Inspector General, VA Police Service, Homeland Security Investigations, and the FBI. Agents uncovered falsified invoices, internal emails acknowledging the deception, and testimony from whistleblowers within the podiatry division. The evidence painted a picture of greed and betrayal at the highest levels of veteran care.
Assistant U.S. Attorneys Matthew M. Yelovich and Lee S. Bickley prosecuted the case with a no-nonsense approach, emphasizing the moral breach of trust. ‘These men didn’t just break the law,’ Yelovich said in closing arguments. ‘They betrayed the men and women who served our country — veterans who trusted their doctors and their benefits system.’
Lazzarino and Wong are set to be sentenced by U.S. District Judge John A. Mendez on August 27. They face a maximum statutory penalty of 10 years in prison and a $250,000 fine for each count of health care fraud, and up to five years and a $250,000 fine for the wire fraud conspiracy count. While the final sentence will consider federal guidelines, prosecutors are demanding accountability. The VA says it is reviewing its procurement protocols to prevent future exploitation.
RELATED: Anthony Lazzarino, Peter Wong Indicted in VA Shoe Fraud Scheme
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Key Facts
- State: California
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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