By: Richard L. Smith
A New York man admitted in federal court Tuesday that he participated in a massive health care fraud scheme that defrauded Amtrak’s employee health care plan out of millions of dollars, federal officials announced.
Jaekwan Lee, 41, of Flushing, New York, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to conspiracy to commit health care fraud, according to a statement released by U.S. Attorney Robert Frazer.
Federal authorities said that between January 2022 and June 2022, Lee, a licensed physical therapist, allowed his professional license and business bank accounts to be used to submit fraudulent insurance claims for medical services that were either never provided or medically unnecessary. In return, Lee received a portion of the illegal proceeds.
Investigators said co-conspirators recruited Amtrak employees into the scheme by offering them cash kickbacks in exchange for the use of their personal and insurance information to file false claims through the Amtrak health care plan.
According to prosecutors, the conspiracy involved dozens of Amtrak employees and several health care providers who collectively paid hundreds of thousands of dollars in cash kickbacks.
Authorities said the Amtrak health care plan ultimately paid more than $11 million in fraudulent claims tied to the overall operation.
Officials stated that more than $800,000 in fraudulent claims were connected specifically to Lee.
The investigation has now led to the prosecution of 19 individuals, all of whom have pleaded guilty to conspiracy to commit health care fraud.
Lee faces a maximum sentence of 10 years in federal prison and a fine of up to $250,000, or twice the gross gain or loss resulting from the offense.
Sentencing is scheduled for October 8, 2026.