Physician Sentenced to 48 Months in Federal Prison for Role in Health Care Fraud Conspiracy
Dr. Daniel K. Leong, Who Owned South Dallas Community Medical Center, is Also Ordered to Pay Nearly $900,000 in Restitution

DALLAS—Dr. Daniel K. Leong, 59, who owned South Dallas Community Medical Center (SDCMC) on Martin Luther King Blvd., in Dallas, was sentenced yesterday by U.S. District Judge Ed Kinkeade to 48 months in federal prison and ordered to pay $865,163 in restitution for his role in a conspiracy to defraud Medicare and Medicaid. Leong must surrender to the Bureau of Prisons on January 15, 2014. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Specifically, on the day his federal trial was to begin in January 2013, Leong pleaded guilty to one count of conspiracy to commit health care fraud. Leong’s co-conspirator in the case, Cal Graves, who worked as a physician assistant at the SDCMC, pleaded guilty to the same offense and was sentenced in February 2013 to a three-year term of probation and ordered to pay $294,946 in restitution.

According to documents filed in the case, by falsely representing that office visits and diagnostics were medically necessary, patients at SDCMC were prescribed controlled substances in exchange for submitting themselves to diagnostic tests. This ensured that they would return to the clinic the next month, thus making themselves available for more tests. Often, patients would exaggerate their pain level to provide a basis for a prescription for narcotics. Leong benefitted from the exaggeration because it gave him “cover” to order more tests. The patients were rarely referred to specialists for their persistent pain, and this process was repeated for up to several years without any actual treatment for some patients.

Leong and Graves frequently ordered tests known as electromyograms (EMG) that are used to diagnose neurological and neuromuscular problems. These tests are also highly reimbursable by Medicare and Medicaid. Often, the test results were never read and Graves did not have the proper training to read them.

In February 2010, Leong signed a blank prescription that reflected his authority to prescribe controlled substances. He instructed Graves and other SDCMC staff to copy this prescription as needed. When patients came to SDCMC, Graves used the pre-signed prescriptions.

Medicare and Medicaid would not have paid claims for office visits, diagnostic testing or prescriptions if they had known either that the services were medically unnecessary and that Leong did not prescribe the medications.

The case was prosecuted by Assistant U.S. Attorney Mindy Sauter. The investigation was conducted by the FBI, U.S. Health and Human Services (HHS) Office of Inspector General (OIG) and the Texas Attorney General’s Medicaid Fraud Control Unit.

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.