Putting Fraud to Bed

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According to the American Sleep Association (ASA), between 50 and 70 million adults in the U.S. have a sleep disorder. The former owner of multiple sleep study clinics in Maryland and Northern Virginia capitalized on those statistics by causing a loss of more than $1 million to government healthcare programs through his healthcare fraud scheme. (I imagine that his patients never dreamed they’d become victims while getting some shuteye.)

Some of the most common sleep disorders Americans report are snoring, falling asleep during the day or while driving, drowsy driving and sleep apnea. With sleep deprivation statistics at an alarming level, many doctors are referring their patients to sleep clinics to have sleep testing completed. Today’s fraudster capitalized on the multitude of blurry eyed customers he hoodwinked by paying their referring physicians kickbacks to get them into his sleep clinics’ beds.

For more than nine years, today’s fraudster from Centreville, Virginia helped control, manage and oversee several corporations that provided sleep studies and related treatment through clinics in Northern Virginia and Maryland. He and a co-conspirator paid kickbacks not only to doctors for referrals, but also to individuals that really didn’t need a sleep study. (The whole purpose of the scheme was to stuff the extra money under their mattresses in hopes the feds wouldn’t find it.)

The fraudster and his co-conspirator submitted $200 million in bogus claims to multiple healthcare benefits programs. Their deceptive acts also caused one of the companies to pay personal expenses that were actually business expenses. (They tried to reduce their taxable income by misclassifying their personal expenses as business expenses.)

Additional research found that with the excess income, the two also purchased expensive vehicles, luxury clothing, exotic vacations and real estate in Hawaii and Chicago, as well as land in Northern Virginia with plans to construct a multi-million dollar, 25,000-square-foot home. And, let’s not forget about the fraudulent personal and corporate income tax returns that were filed. (All in all, today’s criminal caused between $4.5 and $25 million in losses, not to mention the loss of sleep incurred by many.)

The 43-year-old man from Centreville pleaded guilty to healthcare fraud and is scheduled to be sentenced in the Fall. It looks like this case has been put to bed and all that’s left is to tuck this fraudster into his cell bunk.

Today’s “Fraud of the Day” is based on a Department of Justice press release entitled, Former Owner of Sleep Study Clinics Pleads Guilty to Fraud, Tax Charges,” released on December 21, 2017.

ALEXANDRIA, Va. – The former owner of 1st Class Sleep Diagnostic Center and 1st Class Medical, pleaded guilty today to conspiracy to commit health care and wire fraud, and conspiracy to defraud the United States.

According to court documents, from at least 2005 through 2014, Dannie Ahn, 43, of Centreville, helped control, manage, and oversee various corporations, to include 1st Class Sleep Diagnostic Center and 1st Class Medical, which provided sleep studies and sleep-related treatment at clinics located throughout Northern Virginia and Maryland.

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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.