Acupuncturist Sentenced to 2½ Years in Federal Prison for Defrauding Amtrak’s Health Care Plan out of Millions of Dollars

          LOS ANGELES – A licensed acupuncturist was sentenced late this afternoon to 30 months in federal prison for fraudulently billing Amtrak’s health care plan for $7.1 million in acupuncture, massages and facials that either were medically unnecessary or were never provided.

          Guiqiong Xiao Gudmundsen, 53, a.k.a. “Kimi” Gudmundsen, of Anaheim Hills, was sentenced by United States District Judge Dolly M. Gee. Judge Gee also ordered her to pay $2,683,903 in restitution to Amtrak.

          In October 2019, Gudmundsen pleaded guilty to one count of health care fraud and one count of money laundering.

          Gudmundsen owned Healthy Life Acupuncture Center, which operated in Riverside and Los Angeles. From January 2008 until December 2015, Gudmundsen recruited Amtrak employees to visit Healthy Life and then, among other things, billed the Amtrak health care plan for acupuncture, which she knew wasn’t being provided.

          She billed the health plan for medically unnecessary services such as massages and facials, as well as for work-related injuries she knew the Amtrak plan did not cover. Gudmundsen also provided medical services to non-Amtrak health care plan participants and then billed the plan for it under the name of an actual Amtrak plan participant.

          Gudmundsen regularly waived co-payments, co-insurance, and deductibles for Amtrak health care plan participants, something the plan did not permit. She double billed to other insurance plans, and she provided services to returning patients falsely billed as “new patients” in order to take advantage of higher reimbursement rates.

          During the course of the scheme, Gudmundsen billed Amtrak’s health care plan in amounts comparable to large research hospitals and medical institutions that dwarfed other acupuncturists, court papers state. In 2013, Gudmundsen was ranked 32nd in the United States among health care providers for the amount billed to the Amtrak health care plan – above Johns Hopkins Hospital in Baltimore, which was ranked 39th, according to court documents.

          Finally, she knowingly and routinely funneled her ill-gotten gains through bank accounts opened in the names of a shell company and her relatives.

          Gudmundsen’s “entire business model was based on fraud, infiltrating all the services that she provided (and those she did not provide),” prosecutors wrote in their sentencing memorandum. “The Amtrak health care plan provides much-needed health care services to Amtrak union employees and their dependents. These types of fraud schemes increase the costs of such health insurance plans.”

          This matter was investigated by Amtrak Office of Inspector General, IRS Criminal Investigation, and the U.S. Department of Labor’s Employee Benefits Security Administration.

          This case was prosecuted by Assistant United States Attorneys Scott D. Dubois and Jenna G. Williams of the General Crimes Section.