Walnut Rehab Owner Gets 5+ Years for $3.4M Medicare Scam

LOS ANGELES – Simon Hong, 55, of Brea, is headed to federal prison for orchestrating a brazen $3.4 million Medicare fraud. The owner of JH Physical Therapy Inc. in Walnut was sentenced today to 63 months behind bars for billing the government for occupational therapy services that were never rendered, a scheme built on lies and stolen taxpayer money.

U.S. District Judge George H. Wu didn’t just hand down the prison sentence. He also ordered Hong to pay a staggering $2,407,857 in restitution – a fraction of the damage done, but a start. Hong previously pleaded guilty on December 15 to one count of conspiracy to commit health care fraud, but this isn’t his first rodeo with the law. He’s already facing over a decade in prison from a separate conviction, with this 63-month sentence running concurrently.

Federal prosecutors laid out the details of the scam. Hong didn’t just run a fraudulent clinic; he actively concealed his ownership by using a “straw” owner, a nominee meant to shield him from accountability. Instead of legitimate occupational therapy, patients at JH Physical Therapy received acupuncture and massage – services Medicare doesn’t cover. Then, Hong allegedly directed his therapists to falsify records, creating the illusion that the billed services were actually provided. The lion’s share – 87 percent – of the ill-gotten Medicare funds flowed directly into Hong’s pockets.

The scheme ran from October 2009 to December 2012, racking up approximately $3,454,485 in false claims. Medicare ultimately paid out roughly $2,407,857 before the scheme unraveled. Acting Assistant Attorney General Kenneth A. Blanco, U.S. Attorney Eileen M. Decker, and Special Agent in Charge Christian J. Schrank of the HHS-OIG Los Angeles Regional Office announced the sentencing, highlighting the severity of the crime. “This type of fraudulent conduct is a burden on the entire health care system,” Decker stated, “drives up costs for patients and compromises the delivery of services to people who legitimately need care.”

Hong was indicted on June 16, 2016, alongside Grace Hong, 51, of Brea, and Keith Canlapan, 38, of West Covina. Canlapan has already pleaded guilty to conspiracy to commit health care fraud. Grace Hong is currently scheduled for trial on March 21. As with all criminal cases, the defendants are presumed innocent until proven guilty. This investigation was spearheaded by HHS-OIG, with the prosecution handled by Trial Attorneys Niall M. O’Donnell and Blanca Quintero of the Criminal Division’s Fraud Section.

This case serves as a stark reminder that healthcare fraud isn’t a victimless crime. It’s a direct assault on a system designed to protect the vulnerable, and those who exploit it will face the full force of the law. The Grimy Times will continue to follow this case and report on any further developments.