Healthcare Fraud: Simon Hong Convicted of Eight Counts of Healthcare Fraud, Nine Counts of Illegal Kickbacks Related to Healthcare Referrals

Healthcare Fraud
Scheme that Stole Millions from Medicare Program

Brea Man Who Operated Physical Therapy Clinics Convicted in Scheme that Stole Millions from Medicare Program

SANTA ANA, California – A Brea man who operated rehabilitation clinics in Walnut, Torrance and Los Angeles has been convicted by a federal jury of defrauding Medicare out of millions of dollars.

Simon Hong (who is also known as Seong Wook Hong), 54, was convicted Wednesday of eight counts of healthcare fraud, nine counts of illegal kickbacks related to healthcare referrals and two counts of aggravated identity theft.

The scheme revolved around clinics operated by Hong’s companies called Hong’s Medical Management, Inc., CMH Practice Solution, and HK Practice and Solution, Inc. According to the evidence presented at trial, Hong conspired with others to submit false claims to Medicare. 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, the 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.

After the jury returned its verdicts, United States District Judge David O. Carter set Hong’s sentencing hearing for January 9, 2017, at which time Hong will face a statutory maximum sentence of 129 years in prison and a mandatory minimum sentence of two years in prison.

“Schemes that steal money from the Medicare program harm taxpayers and raise healthcare costs,” said United States Attorney Eileen M. Decker. “This case is a prime example of the Department of Justice’s focus on protecting the assets of the Medicare program and the health of Americans who participate in it.”

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, pleaded guilty last January to one count of healthcare fraud and one count of illegal kickbacks;
  • Danniel Goyena, 39, of Buena Park, pleaded guilty last December to two counts of healthcare fraud;
  • Marlon Sonco, 39, of Sylmar, pleaded guilty in June 2015 to conspiracy;
  • Eddieson Legaspi, 40, of Lomita, an employee of Rehab Dynamics, pleaded guilty in August 2015 to conspiracy to commit healthcare fraud;
  • Ohun Kwon, 50, of Fullerton, the owner/operator of E.K. Medical Management, which referred patients to Rehab Dynamics, pleaded guilty in August 2015 to conspiracy to commit healthcare fraud and was sentenced last week to 27 months in federal prison;
  • Leovigildo Sayat, 39, of Torrance, an employee of RSG Rehab, pleaded guilty in October 2015 to conspiracy to commit health care fraud;
  • Byong Chun “David” Min, 68, of Irvine, co-owner/operator of Glory Rehab Team, which operated as Dream Hospital in Orange County, pleaded guilty in May to healthcare fraud and illegal kickbacks; and
  • Jason S. Min, 35, of Irvine, David Min’s son, who was the other owner/operator of Glory Rehab, pleaded guilty last month to Obstruction of Justice.

“Mr. Hong exploited the Medicare system to generate millions in fraudulent proceeds at the expense of honest taxpayers,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “This case should serve as a warning to others involved in health care fraud as Mr. Hong faces significant prison time after being found guilty by a jury at trial.”

“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 could cost Mr. Hong years in prison. As this conviction 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 funds.”

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

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