Lakewood Couple Indicted By Grand Jury With 20 Counts of Health Care Fraud, Obstruction of Justice and Money Laundering

Two Lakewood residents were indicted by the grand jury earlier this year for 20 counts of health fraud, obstruction of justice and money laundering, according to a press release by the United States Attorney's Office.

Alfred Hongleung Chan, 63 and Judy Yuan Chan, 62, are scheduled to appear in a U.S. District Court in Tacoma July 29. The Chans conspired to bill Medicare and other government and private healthcare programs for larger amounts of medicine than were actually delivered to patients, the indictment alleges.

The scheme, according to the government, generated $1.7 million of illegal clinic income. If convicted of the charges, the Chans may face up to 20 years in prison.

According to the indictment and the civil litigation:

Alfred Chan would make patient treatment notes on individual slips of paper, which were given to his nurse. The notes specified the amount of drugs to be provided to a specific patient. After a nurse had provided the drugs to patients by injection or infusion, the slips of paper were returned to Dr. Chan who shredded them.

The doctor then made entries into a “Superbill” form, ostensibly recording the amount of medications the patients had received.  However, evidence in the case indicates Chan recorded more medication administered than actually received by the patient, and claimed more time spent administering the medication than actually occurred. Judy Chan then prepared the bills for Medicare and other government and private health care programs, using the inflated amounts, substantially increasing the amount of money owed to the Chan clinic for medication.

“The conduct alleged in this indictment illustrates the complete disregard for government sponsored healthcare programs, including the Medicare program,” said Ivan Negroni, Special Agent-in-Charge of the San Francisco Region for the United States Department of Health and Human Services, Office of the Inspector General.

The Chans began entering false information into patient records no later than 2006, the press release stated. It surfaced after a former employee of the Chans' Lakewood clinic filed a civil suit. The government reportedly joined the civil suit in 2010.