ALEXANDRIA, Va. – A federal jury convicted a Sterling woman
today on health care fraud and tax charges for operating a fraudulent sleep
study clinic in Northern Virginia.
“Yi lied to, cheated, and stole from taxpayers and insurance
companies,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District
of Virginia. “When someone commits healthcare and tax fraud it drives up the
cost of care for everyone and creates an un-level playing field. Yi misled
patients and their doctors, falsified records to cover it up, and deducted
millions in taxes she used to buy expensive properties and luxury goods. I want
to thank our trial team and investigative partners for their terrific work on
this complex and important case.”
According to court records and evidence presented at trial,
Young Yi, 44, a citizen of South Korea, obtained more than $83 million from
Medicare and private insurance during the health care fraud conspiracy and
lowered her taxes by nearly $900,000 in one tax year alone. Yi formed the
primary entities she used to commit the crimes, 1st Class Sleep Diagnostic
Center and 1st Class Medical, in 2005. Using those and other entities, Yi
directed her employees to solicit patients who had been referred to her clinic
for legitimate sleep studies for supplemental but medically unnecessary
studies. To conceal the scheme, Yi instructed employees not to send the results
of the fraudulent studies to the patients’ doctors, lied to patients by telling
them they did not have to pay copays or coinsurance, and cross-billed using her
different entities both to conceal the repetition from the insurance companies
and to get out-of-network payments for in-network services. The cross-billing
between the two lead entities alone was approximately $4 million. Yi also used
the original referring doctors’ names and identifying information on health
insurance claims without their permission, the evidence showed.
“Young Yi fueled her lavish lifestyle by misleading
patients, withholding information from physicians, and using doctors’
identifying information without their permission in order to steal millions of
dollars from Medicare and private insurers,” said Brian A. Benczkowski,
Assistant Attorney General of the Justice Department’s Criminal Division.
“Today’s verdict highlights the important work of the Department and our law
enforcement partners as we seek to hold people accountable for defrauding our
health care system.”
According to the evidence presented at trial, Yi used her
business bank accounts to purchase personal luxury goods and real estate that
she nonetheless booked as business expenses. Those falsely booked purchases
included a $25,000 Rolex watch, $10,500 in mink coats, several luxury vehicles
and a $1.1 million home in Sterling, Virginia.
Yi also used the proceeds of her crimes to purchase five condominiums
worth more than $2.8 million in McLean, Virginia; Chicago, Illinois; and
Honolulu, Hawaii. Yi used money that she
falsely booked as payments for medical supplies and health insurance
reimbursements to purchase land in Great Falls, Virginia. After a February 2014
search warrant was executed at her businesses, Yi and her husband formed a
purported charity, and transferred assets into that foundation to protect them
from law enforcement.
In addition to the medically unnecessary sleep studies
performed on patients who had been referred by doctors to 1st Class Sleep
Diagnostic Center, Yi also encouraged her own employees to have sleep studies
that were then billed to insurance, the evidence showed. Those included claims charged in the
indictment for three employees who did not have sleep apnea but nonetheless received
at least 27 sleep studies between them in less than three years. The employees received payments for
undergoing the sleep studies, and in some instances, the employees were
organized into teams for “races” to see who could refer the greatest number of
friends and family members for the fraudulent studies.
Yi’s co-defendant, Dannie Ahn, pleaded guilty in December
2017 and is scheduled to be sentenced on September 14.
Yi was convicted of one count of conspiracy to commit health
care and wire fraud, seven counts of health care fraud, one count of conspiracy
to defraud the United States, and one count of filing a false tax return. She is scheduled to be sentenced on November
2.
The Fraud Section leads the Medicare Fraud Strike Force,
which is part of a joint initiative between the Department of Justice and HHS
to focus their efforts to prevent and deter fraud and enforce current
anti-fraud laws around the country. The Medicare Fraud Strike Force operates in
nine locations nationwide. Since its inception in March 2007, the Medicare
Fraud Strike Force has charged over 3,500 defendants who collectively have
falsely billed the Medicare program for over $12.5 billion.
G. Zachary Terwilliger, U.S. Attorney for the Eastern
District of Virginia, Brian A. Benczkowski, Assistant Attorney General of the
Justice Department’s Criminal Division, Nancy McNamara, Assistant Director in
Charge of the FBI’s Washington Field Office, Kelly R. Jackson, Acting Special
Agent in Charge of IRS-Criminal Investigation, Washington D.C. Field Office,
Bret D. Mastronardi, Special Agent in Charge for the Office of Personnel
Management Office, Robert E. Craig, Special Agent in Charge for the Defense
Criminal Investigative Service’s Mid-Atlantic Field Office, and Maureen Dixon,
Special Agent in Charge of the U.S. Department of Health and Human Services,
Office of Inspector General (HHS-OIG), made the announcement. Assistant U.S.
Attorneys Katherine L. Wong and Ryan S. Faulconer, and Trial Attorney Kevin
Lowell of the Criminal Division’s Fraud Section are prosecuting the case.
A copy of this press release is located on the website of
the U.S. Attorney’s Office for the Eastern District of Virginia. Related court
documents and information is located on the website of the District Court for
the Eastern District of Virginia or on PACER by searching for Case No.
1:17-cr-224.
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