A 71-year-old acupuncturist, Junyi Liu (also known as Jenny), from Great Neck town in Long Island, was sentenced to 18 months in prison by the Southern District of New York federal court on February 25 for conspiring to commit healthcare fraud. Prosecutors alleged that she operated multiple medical offices in Manhattan, Brooklyn, and Queens from 2018 to 2021, fraudulently billing over $24 million to medical insurance and other insurance companies through false or unnecessary acupuncture and physical therapy services.
Junyi Liu pleaded guilty in March last year. According to the Pre-Sentencing Report (PSR), the fraudulent scheme resulted in over $23.85 million in losses. Additionally, she admitted to receiving $40,075 in COVID-19 unemployment relief benefits fraudulently. As part of the plea agreement, she is required to reimburse insurance companies $23,855,425, repay $40,075 to the New York State Department of Labor, and consent to forfeit $15,368,171 in illegal proceeds.
Prosecutors stated that Junyi Liu was the mastermind behind the entire scheme. She collaborated with several licensed medical professionals, including physical therapists and acupuncturists, to submit false insurance claims using their respective credentials and fabricate medical records, claiming to have provided services.
To attract “paying patients” to provide insurance information, she instructed employees to offer cash kickbacks. Some patients received unnecessary treatments, while others merely signed documents and left without receiving services or even showing up at the clinic. Regardless of whether they actually received treatment, the clinic billed insurance companies using their information.
In one instance disclosed in the case, on January 22, 2020, an informant spent only about 7 minutes in Liu’s office, did not receive any treatment, yet received a $50 cash kickback. Subsequently, co-conspirators still submitted multiple claims for physical therapy and acupuncture services to the informant’s insurance company.
Investigations revealed that the fraudulent proceeds were initially deposited into bank accounts jointly held by Liu and acupuncturist Hongxing Wang. Over $15 million was then transferred to Liu’s personal account, with over a million dollars withdrawn as cash and several million dollars transferred to companies unrelated to healthcare.
Prosecutors noted that Liu currently reports assets of around $1.1 million, yet her actual profits from the criminal activity far exceed this amount. She reportedly purchased a seven-bedroom, seven-bathroom residence for approximately $2.6 million in October 2020, registered under a family member’s name; this family member had worked at the clinic and received COVID-19 unemployment relief benefits from August 2020 to August 2021.
The defense argued that the basic facts of the case were not in dispute. Roughly a decade ago, it became increasingly common in certain Asian communities to offer compensation to patients or customers at medical facilities, elderly centers, and pharmacies, almost becoming an open “norm.” In fact, such improper practices became prevalent to the extent that non-participants might lose clientele. Within this operational model, multiple partners— including physical therapists and acupuncturists— pooled revenues from the relevant institutions, which also invested substantial funds to attract patients through cash or other means.
However, prosecutors argued that although such practices may be “common” within specific circles, they cannot justify illegal behavior; just as “everyone else is doing it” is not a defense for a speeding ticket. If this “popular” practice eventually “inevitably” evolves into healthcare fraud to some extent, it highlights the importance of enhancing deterrence.
Furthermore, prosecutors pointed out that Ms. Liu has no significant criminal record, and her education and professional background are commendable. However, it was precisely due to her relevant professional qualifications and years of experience in the field that enabled her to drive and sustain a multimillion-dollar fraud scheme over many years.
According to the defense’s sentencing memorandum, Liu is a non-citizen, and upon completion of her sentence, she may be transferred to the U.S. Immigration and Customs Enforcement (ICE) for long-term detention and deportation proceedings back to China.