Insurers Defrauded of $300K By Bogus PT Clinic Scheme

Chang Goo Yoon, a 61-year-old South Korean national residing in Queens, New York, was convicted on January 17, 2024, on two counts of healthcare fraud by a federal jury sitting in Boston. The conviction relates to an extensive scheme Yoon orchestrated at several physical therapy clinics he owned in the greater Boston area between 2014 and 2018.

On February 23, 2021, Federal agents arrested Yoon on healthcare fraud charges today as he attempted to board an international flight at John F. Kennedy International Airport. After being returned to Boston for arraignment, a federal magistrate judge released him from custody conditional upon Yoon surrendering his passport and restricting his travel to New York City, Long Island, and Boston for court appearances.

Yoon’s Massachusetts Clinics

Yoon owned and operated physical therapy clinics in Allston, Waltham, and Brookline between 2009 and 2020. Before operating in Massachusetts, Yoon had permanently surrendered his Colorado physical therapy license in 2007 based on charges including “Committed a fraudulent insurance act.” In 2008, the U.S. Department of Health and Human Services excluded YOON from participating in Medicare, Medicaid, and all other federal healthcare programs, and in 2010.

On February 21, 2021, the FBI agent investigating Yoon submitted an affidavit for an arrest warrant to a federal magistrate judge, stating:

“Yoon set up several companies in Massachusetts and regularly changed the corporate names, location, and corporate officers of his businesses…. He set up multiple business entities operating out of the same physical location during the same time period. Based on my training and experience, I believe Yoon frequently changed corporate names and simultaneously used different corporate names for the same clinic to disguise his identity from insurance companies.”

Yoon’s Fraud Scheme

The healthcare fraud scheme Yoon carried out in Massachusetts took several different forms, according to prosecutors:

Yoon billed insurers approximately $150,000 for physical therapy appointments purportedly provided while he traveled to South Korea, Los Angeles, and Toronto on the appointment dates.

He submitted around $50,000 in claims for appointments that supposedly took place on dates while gambling at various casinos, including in Atlantic City, Springfield, MA, and Lincoln, RI.

Yoon fraudulently billed his auto insurer, MAPFRE, approximately $30,000 for physical therapy services related to three different car accidents where he claimed personal injuries. Most of the billings to MAPFRE listed an employee as the service provider, even though she never treated Yoon. After this employee left his practice, Yoon listed himself as both the patient and service provider for his alleged “treatments.”

In total, prosecutors stated that Yoon’s schemes resulted in over $300,000 in false claims billed to insurers such as Blue Cross Blue Shield, Aetna, and MAPFRE over the period spanning from 2014 to 2018, to which the indictments related.

The seven-day jury trial

The prosecution presented its case for the conviction of Yoon on two counts of felony healthcare fraud over a seven-day jury trial.

The prosecution presented extensive evidence from former patients of Yoon’s clinics, representatives from the defrauded insurance companies, and his former employees.

Through witness testimony, the prosecution explained in detail how Yoon’s scheme worked. The fraudulent plan included submitting falsified medical records for insurance payments, fabricated billing codes for services not rendered, and exploitation of billing procedures to hide fraud from insurers.

In particular, the prosecution showed Yoon billed for physical therapy sessions while traveling in the billing records in South Korea, Los Angeles, and Toronto during the same dates. They introduced evidence such as flight records and border crossing documents placing Yoon out of Massachusetts when he purported to be treating patients at his clinics.

The prosecution’s testimony also demonstrated Yoon submitted bills listing himself as rendering services to patients on other dates when casino records introduced in evidence showed him gambling at the Golden Nugget in Atlantic City, N.J., MGM Springfield in Massachusetts, or Twin River Casino in Lincoln, R.I.

Quick verdict of guilty

On January 17, the final day of Yoon’s trial, which started at 9:00 A.M., the government called a witness and introduced its last exhibit. Yoon did not testify or present any defense witnesses.

The lawyers for the prosecution and the defense gave their final arguments, and the judge charged the jury with the law. Shortly before noon, the jury retired to deliberate, and at 12:52 P.M., the same day, the jury sent a note that it had reached a verdict, which, when announced in court, was “Guilty” on both counts.

Health Care Fraud statute provides for fines and up to ten years in prison

The two counts on which the jury convicted Yoon were violations of Title 18, § 1347, of the U.S. Code, Health Care Benefit Fraud, which states:

“[w]hoever knowingly and willfully executes, or attempts to execute, a scheme or artifice—(1) to defraud any health care benefit program; or (2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than ten years, or both.”

The Court schedules Yoon’s sentencing for May 2024

The federal court has scheduled Yoon’s sentencing for May 8, 2024, at 2:00 P.M.

The “Federal Sentencing Guidelines give the basis for the sentences for federal judges to impose for criminal convictions. The guidelines provide a range of sentences based on many factors related to the crime, aggravating and mitigating circumstances, the defendant’s history, and public policy.

Before sentencing, a presentence investigation report must be conducted by the probation officer and submitted to the court. The report must also identify all the Sentencing Commission’s applicable guidelines and policy statements, calculate the defendant’s offense level and criminal history category, state the resulting sentencing range and kinds of sentences available, and identify any basis for departing from the applicable sentencing range.

Both the United States Attorney and Yoon’s defense counsel will submit sentencing memoranda suggesting to the Court the appropriate sentence under the guidelines and providing any reasons for enhancing upwards (prosecution) or deviating downwards (defense counsel) from the guideline’s proposed sentence range.

The prosecution team

Acting U.S. Attorney Levy, FBI SAC Cohen, IFB Chief Anthony DiPaolo, and  USPIS INC Larco-Ward announced Yoon’s conviction. Assistant U.S. Attorneys Elysa Q. Wan and Patrick M. Callahan of the Criminal Division are prosecuting the case.

Agency Checklists will keep you posted on Chang Soo Yoon’s sentencing.