If the Shoe Fits

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Silhouette of lonely elderly man walking with a walker near the window at home

Military service can put a lot of pressure on feet. Overuse can not only cause injuries and inflammation to bones, ligaments and joints, it can also lead to bunions, plantar fasciitis and arthritis. (Oh, my aching feet!) Today’s “Fraud of the Day” is particularly egregious because it highlights a provider of podiatry services in California who committed fraud against the U.S. Department of Veterans Affairs (VA). (By the way, thanks to all our servicemembers for putting up with those maladies in order to protect our country.)

The CEO of an orthotics company in Sacramento teamed up with the former chief of podiatry for the VA Northern California Health Care System to conspire to commit fraud between 2008 and 2015. (It helps to have friends in high places I suppose.) A judge last month sentenced the businessman to five years in federal prison for healthcare fraud and wire fraud related to billing the VA for work not performed.

Last year, a jury found the 61-year-old founder and former CEO of Sunrise Shoes and Pedorthic Service Corp. and a co-conspirator, the 69-year-old former VA chief of podiatry, guilty of healthcare fraud and conspiracy to commit wire fraud. (After that verdict, I bet they are both kicking themselves for carrying out this ridiculous scheme.) The jury found that the two unethical men engaged in a scheme to defraud the VA by billing for custom work and services that were prescribed – but not supplied – in shoes delivered to veterans.

The jury also found that a former employee of the orthotics company – a maker of custom shoes, orthotics and braces – agreed to make false statements to the VA regarding where shoes were made, while applying for an $11 million annual contract. (Imagine the possibilities of having that much money in your bank account. One could buy enough shoes to rival the Imelda Marcos collection.) That employee pleaded guilty in 2016 and was sentenced to one year and one day in prison.

The podiatrist from Sacramento is scheduled to be sentenced in February. He faces up to a decade in prison and a $250,000 fine for each healthcare fraud count. (If he serves time in prison, it’s a given that he’ll have more than aching feet to worry about.)

Today’s “Fraud of the Day” comes from the article, “Former CEO sentenced to five years in prison for VA health care fraud,” published Dec. 18, 2019 in the Sacramento Business Journal.

A federal judge in Sacramento sentenced the former CEO of a Sacramento company to five years in prison for health care fraud and wire fraud related to billing Veterans Affairs for work not done.

Peter Wong, 61, founder and former CEO of Sunrise Shoes and Pedorthic Service Corp., was sentenced Tuesday by Judge John Mendez of the U.S. District Court for the Eastern District of California.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.