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Brea Man Who Operated Physical Therapy Clinics Sentenced to Over 10 Years in Federal Prison in $3 Million Medicare Fraud Scheme

Posted by Fay Arfa | Jan 11, 2017 | 0 Comments

SANTA ANA, California – A Brea man who operated rehabilitation clinics in Walnut, Torrance and Los Angeles and defrauded Medicare out of approximately $3 million by billing for unneeded or unnecessary services has been sentenced to 121 months in federal prison.

Simon Hong (who is also known as Seong Wook Hong), 55, was sentenced yesterday afternoon by United States District Judge David O. Carter. At the conclusion of the sentencing hearing, Judge Carter ordered Hong remanded into custody.

Hong was found guilty in October of eight counts of healthcare fraud, nine counts of illegal kickbacks related to healthcare referrals and two counts of aggravated identity theft.

Hong owned physical therapy clinics operated by companies called Hong's Medical Management, Inc., CMH Practice Solution, and HK Practice and Solution, Inc. As part of the scheme, Hong recruited Medicare beneficiaries and provided uncovered services like massage and acupuncture for them. Even though the beneficiaries did not receive actual physical therapy, Hong's co-conspirators billed Medicare for physical therapy, and then funneled 56 percent of the reimbursement funds back to Hong.

Through this scheme Hong and his co-conspirators billed Medicare from the spring of 2009 until November 2013 and received approximately $2,929,775 in reimbursements, of which Hong received approximately $1,640,674. During today's sentencing hearing, Judge Carter ordered Hong to pay $2,929,775 in restitution.

“This defendant stole nearly $3 million in federal money earmarked for those with serious medical needs,” said United States Attorney Eileen M. Decker. “This lengthy sentence accurately reflects the scope of the harm caused by the defendant to American taxpayers and legitimate Medicare beneficiaries. My office will continue to bring prosecutions against criminals causing harm to federal programs.”

Hong is one of 10 defendants who were charged in 2015 and early 2016 for healthcare fraud related to physical therapy. Eight others have pled guilty, and one, David Y. Kim, 54, of Los Angeles, remains a fugitive. Those previously convicted in the investigation are:

· Joseff Sales, 39, of Buena Park, a co-owner and operator of Rehab Dynamics, who pleaded guilty to one count of healthcare fraud and one count of illegal kickbacks, and was sentenced last year to 51 months in prison;

· Danniel Goyena, 39, of Buena Park, a co-owner and operator of Rehab Dynamics, who pleaded guilty to two counts of healthcare fraud and was sentenced last year to 51 months in prison;

· Marlon Sonco, 39, of Sylmar, who pleaded guilty in June 2015 to conspiracy and is scheduled to be sentenced on January 23;

· Eddieson Legaspi, 40, of Lomita, an employee of Rehab Dynamics, pleaded guilty to conspiracy to commit healthcare fraud and also was sentenced yesterday to 15 months;

· Ohun Kwon, 50, of Fullerton, the owner/operator of E.K. Medical Management, which referred patients to Rehab Dynamics, pleaded guilty to conspiracy to commit healthcare fraud and was sentenced last year to 27 months in federal prison;

· Leovigildo Sayat, 39, of Torrance, an employee of RSG Rehab, pleaded guilty to conspiracy to commit health care fraud and was sentenced last year to two years in prison;

· Byong Chun “David” Min, 68, of Irvine, co-owner/operator of Glory Rehab Team, which operated as Dream Hospital in Orange County, who pleaded guilty to healthcare fraud and illegal kickbacks, also was sentenced yesterday to 45 months in prison; and

· Jason S. Min, 35, of Irvine, David Min's son, who was the other owner/operator of Glory Rehab, pleaded guilty last year to obstruction of justice and is scheduled to be sentenced on February 6.

“Mr. Hong and his co-defendants spent years defrauding the Medicare system at the expense of taxpayers and legitimate healthcare recipients,” said Deirdre Fike, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “Agents and prosecutors worked very diligently on this case to identify and charge multiple defendants in order to hold them responsible for their actions.”

“Medicare provides legitimate health care services for millions of older Americans,” said Christian J. Schrank, HHS OIG Special Agent in Charge of the U.S. Department of Health and Human Services' Office of Inspector General (HHS-OIG). “Fraudulently billing the program for therapies never provided will cost Mr. Hong years in prison. As this sentencing shows, not just providers, but business owners who are partners in these schemes, will pay a price. Together with our law enforcement partners, we will pursue all those involved in stealing from the Medicare trust fund.”

In a separate case, Hong pleaded guilty last month to conspiracy to commit health care fraud in another scheme involving occupational and physical therapy services that were never provided to Medicare beneficiaries. Medicare suffered losses of approximately $2.4 million in relation to this scheme. Hong is scheduled to be sentenced in this case in Los Angeles federal court by United States District Judge George Wu on March 6.

“For almost six years since May 2009, [Hong] participated in or orchestrated schemes to defraud Medicare that led to at least $5.3 million in actual losses to Medicare and potentially over $20 million in intended losses to Medicare, a program that can hardly afford them,” prosecutors wrote in a sentencing memorandum filed in relation to today's sentencing. “He directed numerous others in executing the schemes, perverting the legitimate physical therapy services process at every turn, from patient enrollment to billing to record keeping.”

The investigation in these cases was conducted by the FBI and HHS-OIG. The prosecutions are being handled by Assistant United States Attorneys Byron J. McLain and Sarah Heidel of the Major Frauds Section.

USAO – California, CentralUpdated January 10, 2017

Central District of California DOJ / 17-003 / January 10, 2017

About the Author

Fay Arfa

Fay Arfa has the distinction of being Certified as a Specialist in two separate areas of law – Criminal Law as well as Appellate Law – by the California State Bar, Board of Specialization. The National Board of Trial Advocacy has also awarded her a board Certification in Criminal Trial Advocacy. ...


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