Simon Hong, Occupational Therapy Fraud Scheme, California 2016

Los Angeles County, CA – In a brazen scheme to rip off Medicare, Simon Hong, 55, of Brea, California, was sentenced to 63 months in federal prison for his role in a $3.4 million occupational therapy fraud scheme. Hong, owner of JH Physical Therapy Inc. in Walnut, California, hid his ownership behind a ‘straw’ or nominee owner to conceal the scheme.

As part of the scheme, Hong billed Medicare for occupational therapy services that were not provided to the beneficiaries, instead giving them acupuncture and massage services that were not reimbursable by Medicare. Hong and co-conspirators falsified medical records to make it appear as if the services were provided, and funneled 87 percent of the proceeds to himself.

Through this scheme, Hong 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.

Hong was also 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. In January 2017, Hong was sentenced to 121 months in federal prison for this separate case, to run concurrently with the 63-month sentence imposed by U.S. District Judge George H. Wu.

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. Hong was ordered to pay $2,407,857 in restitution.

The HHS-OIG investigated the case, and the Criminal Division’s Fraud Section Trial Attorney Niall M. O’Donnell and Former Fraud Section Trial Attorney Blanca Quintero prosecuted the case.

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