Long Island acupuncturist Junyi Liu sentenced in scheme to steal $24M from health insurers

An acupuncturist from Great Neck was sentenced on Wednesday to 18 months in prison for orchestrating a scheme to steal $24 million from health insurers and rip off pandemic unemployment insurance programs.

Appearing in Manhattan federal court, Junyi "Jenny" Liu, 71, was also ordered to pay $24 million in restitution. That amount equals what she and eight others defrauded from Medicare and private insurers as well as the jobless benefits that she and a relative received but to which they were not entitled.

Liu will forfeit an additional $15.4 million, including $1.5 million from three banks accounts that she controls.

Chief U.S. District Judge Laura Taylor Swain ordered that Liu's prison sentence begin in late July and until then that she be confined to the Linford Road house where she's been living. Liu will also spend one year of her 3 years of probation in home confinement.

"Home confinement will prevent her from participating in future frauds," the judge said during the two-hour hearing, which was attended by Liu's son, daughter-in-law and a grandchild.

The judge added that sending Liu to prison despite her diagnosis of terminal lung cancer "is reasonable, sufficient and appropriate" given that some of Liu's co-defendants have been given jail time.

Liu's attorney, Kevin J. Keating, disagreed, saying "incarceration is an extraordinary punitive punishment" because Liu only has about eight months to live based on an estimate from her physicians at Memorial Sloan Kettering Cancer Center.

Led fraud scheme

Timothy V. Capozzi, an assistant U.S. attorney, said Liu must be imprisoned because she led the $24 million scheme to defraud Medicare, private insurance companies and the state Department of Labor. Liu embarked on her criminal activity, he said, about a year after finding out she had lung cancer.

"She was the leader and the linchpin that kept [the fraud scheme] going," Capozzi said.

Liu, who was raised in China, ran four medical offices in New York City between 2018 and 2021 that billed insurers for acupuncture and physical therapy sessions that were unnecessary or never performed. She partnered with physical therapists and another acupuncturist in the scheme, according to a federal indictment.

The offices used the medical professionals’ enrollment with insurers to submit false claims for reimbursement that included fake documents. Tens of thousands of dollars were used to pay cash kickbacks to patients and give wine and cash to employees of insurance companies, the indictment states.

Speaking from a wheelchair in court, Liu said the kickbacks to patients were for their transportation to and from her medical offices during the pandemic.

"There were fewer patients and we paid a transportation fee so they could take a ride to our clinics," she said in Mandarin before being interrupted by her attorney.

Liu continued, "I'm really sorry. ... The rest of my life is very short. I hope your honor can offer leniency."

A year ago, Liu pleaded guilty to conspiracy to commit health care fraud. 

Stole pandemic jobless benefits 

At that time, Liu agreed to repay more than $40,000 in unemployment benefits that she and an unidentified relative received by falsely claiming they couldn't work because of COVID-19. Both were employed at the medical offices while they received benefits.

Liu directed office staff to submit unemployment insurance applications for herself and the relative and then to file weekly certifications in 2020 and 2021 falsely stating they were jobless and available for work. The relative spent five months in China during that period, according to the indictment.

On Wednesday, prosecutors said the seven-bedroom, seven-bathroom house in Great Neck that Liu lives in was purchased by the relative for $2.6 million when the pair were receiving jobless benefits. 

Liu is among at least 16 people living or working in Nassau and Suffolk counties who allegedly ripped off the unemployment insurance program and additional pandemic-era programs that temporarily expanded eligibility and boosted weekly payments, according to a Newsday analysis of federal court cases and state administrative decisions. Together, they stole nearly $350,000 in jobless benefits.

After handing down the sentence, Judge Swain addressed Liu, saying, "I hope the disease stabilizes or goes into remission."

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.