Owners Of Lawrence County Medical Clinics Sentenced For Conspiracy To Commit Health Care Fraud

CINCINNATI – Four people involved in the operation of Advanced Family Medical Center and Watkins-Tsai Imaging in Coal Grove, Ohio were sentenced today for conspiracy to commit health care fraud. They improperly charged government insurance programs for medically unnecessary procedures, most of which were related to the overuse of a CT scan machine.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine, Lamont Pugh III, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General, Bret Flinn, Resident Agent in Charge, Defense Criminal Investigative Service, and Antoinette V. Henry, Special Agent in Charge, U.S. Food and Drug Administration Office of Criminal Investigations, announced the sentences handed down today by U.S. District Judge Susan Dlott.  

Peter Tsai, 46, owner of Advanced Family Medical Center, his father and mother, Tahsiung Tsai, 74, and Ruey Tsai, 68, who owned Watkins-Tsai Imaging, and Peter Tsai’s cousin, Wei Lih Sheih, aka “Wendy”, 43, who worked for both clinics, had conspired to defraud health care benefit programs including Medicaid, Medicare and Tri-Care between 2004 and 2013 when they were indicted.

All four defendants pleaded guilty to conspiracy to commit health care fraud in August 2014 after four days of trial. Peter Tsai pleaded guilty to the illegal importing of a medical device, namely the purchase of Synvisc knee injections from Canada and Turkey.

Peter Tsai was sentenced to 78 months in prison for a conspiracy to commit health care fraud and the illegal importing of a medical device. For the conspiracy, Defendants Ruey and Tahsiung Tsai were sentenced to 3 years of supervised release, six months of house detention, and community service.  As part of the plea agreement, Ruey and Tahsiung Tsai were also required to pay $999,000 towards the restitution by today, which they did.  Defendant Wei Lih Sheih was also sentenced to 3 years of supervised release and 12 months of house detention for the conspiracy to commit health care fraud.  

According to court documents, both clinics operated out of the same building in Coal Grove. The conspirators performed numerous CT procedures that were unnecessary.  For example, Peter Tsai diagnosed most of his patients with a condition called piriformis syndrome in order to give injections guided by his CT scan machine. The defendants also performed unnecessary diagnostic CT scans that were medically unnecessary, including multiple scans of the same body part for the same patient weeks apart. They also performed and billed for CT scans for medically unnecessary injections of an osteoarthritis product, Synvisc, in knees, including injection into young adults without any proper diagnosis of osteoarthritis.  One patient received 85 CT-related scans in a 35-month period.

The defendants were also charged with fraudulently inflating their bills to Medicare and Medicaid.  Peter Tsai illegally imported misbranded Synvisc from other countries including Canada and Turkey, billed government insurance programs for the injections and transferred money into an account in a Canadian financial institution in order to buy the product.

Stewart commended the cooperative investigation by agents and officers of the agencies named above, as well as Assistant U.S. Attorneys Timothy Mangan and Timothy Oakley, who are representing the United States.

Anyone suspecting health care fraud, waste or abuse can report it by calling the U.S. Department of Health and Human Services, Office of Inspector General at 800-447-8477.  To learn more about health care fraud prevention and enforcement go to www.stopmedicarefraud.gov. Ohioans can report suspected instances of health care fraud to Attorney General DeWine’s office by calling 1-800-282-0515.