On Wednesday, the Department of Justice posted a press release of a stunning case of healthcare fraud and tax evasion, and announced the indictment of two individuals in Virginia – one, a citizen of South Korea – who have been operating a massive chain of sleep disorder clinics in the United States and submitted approximately $200 million in fraudulent health insurance claims.
The Justice Department noted that since its Medicare Fraud Strike Force was created in 2007, it has charged over 3,500 defendants for falsely billing the Medicare program for over $12.5 BILLION.
In this case, Young Yi, 44, a citizen of South Korea, and Dannie Ahn, 43, of Centreville, Virginia, were indicted for healthcare fraud, wire fraud, and filing false tax returns.
Yi had built up an empire of corporations, including 1st Class Sleep Diagnostic Center and 1st Class Medical, with sleep study clinics located throughout Northern Virginia and Maryland. Ahn helped oversee Yi’s corporations.
A 2012 article in the Washington Post says Yi started the business in 2004.
The Justice Department reports that from at least 2005 through 2014, Yi and Ahn had a scheme going whereby they received reimbursements of approximately $200 million in health insurance claims by submitting false claims to providers, fraudulently incentivizing patients to go through unnecessary treatments, and using identities of doctors without their permission to bill health care benefit programs.
The pair also falsified their business records and misclassified personal expenses as business expenses in order to pay less in taxes.
The indictment alleges that Yi and Ahn similarly caused the creation of various shell companies to acquire, hold and move proceeds derived from the scheme. Yi and Ahn then used the proceeds to purchase expensive vehicles, luxury clothing, exotic vacations and exclusive real estate, including but not limited to, luxury condominiums in Hawaii and Chicago, and a tract of land in the Hidden Springs neighborhood of Great Falls, Virginia, in order to construct “Le Chateau de Lumiere,” a multi-million dollar and approximately 25,000-square-foot home modeled after the Palace of Versailles.
The 2012 Washington Post article reports on the 25,000 mansion Yi was planning to build on a 5-acre plot, which, at that time, was going to cost an estimated $15 to $20 million, having three two-car garages and its own movie theater. The plan was ultimately shut down after outraged neighbors filed a lawsuit to stop it, as it would overshadow every other home in the neighborhood.
Before the mansion project could be stopped, Yi had already cut down many trees on the acreage, which also outraged neighbors, and builders had finished more than $1 million worth of work, including pouring the foundation and installing the septic system.
At the time, it was not known that Yi was paying for it all by filing fraudulent healthcare claims.
The Building Group retained the rights to the building plans, and after Yi pulled out, the company announced they would still build the home, but on a different, larger property.
A YouTube video of the completed Le Chateau de Lumiere is now on the company’s website, and the Washington Post reported in January that The Building Group was looking for a buyer for the home. It reportedly sold in February 2017 for $12 million. (See video below, or photos here.)
CLICK HERE TO SEE THE FULL PRESS RELEASE FROM THE JUSTICE DEPARTMENT regarding Yi’s indictment.