$11M Amtrak fraud scandal results in another prison sentence, $842K restitution judgment
A healthcare fraud scheme looking to bilk money from the Amtrak employee insurance plan resulted in a New York physical therapist going to prison for 15 months.
Jaekwan Lee, 42, was sentenced by a Newark federal court this week, having pleaded guilty in May to a conspiracy to commit healthcare fraud. According to a statement from the U.S. Department of Justice (DOJ), Lee was also ordered to pay nearly $842,000 in restitution. After his prison stint is up, he will also be subjected to two years of supervised release.
As revealed in court, Lee and a group of coconspirators were engaged in a coordinated effort to submit erroneous claims to the Amtrak health plan, billing the payer for patient care services that were never delivered and had no basis in medical necessity.
The fraud was widespread, involving dozens of employees of the public passenger train company, the DOJ said. For his role as a physical therapist, Lee allowed his business accounts and license to be used to funnel money from the reimbursement scam, pocketing a portion of the money gained from insurance.
Meanwhile, coconspirators would recruit other Amtrak workers to act as patients, paying them kickbacks to pretend to utilize Lee for physical therapy needs, allowing Lee and others making referrals to bill the Amtrak plan for the supposed services.
Lee’s role in the scheme lasted from Jan. 2022 to June 2022, the DOJ added.
In total, nineteen people were indicted, including Lee. All have since pleaded guilty. In total, the scheme resulted in the health plan paying out more than $11 million in claims; $842,000 was found to be associated with Lee directly.
The kickbacks to “patients” who would allow their names and personal information to be used to bill insurance totaled hundreds of thousands of dollars in cash over the course of the scam, prosecutors revealed.
PTs in cahoots
As HealthExec covered in May when others pleaded guilty and sentences for some of Lee’s coconspirators were laid down, at least one other physical therapist was involved in the scheme.
Taejin Kim, 44, pleaded guilty on June 11, 2025 and was sentenced to a year in federal prison and ordered to pay $2.2 million in restitution, over twice the penalty faced by Lee.
Much like Lee, prosecutors said in court that Kim allowed her physical therapy license and business bank accounts to be used as part of the effort to defraud Amtrak’s health plan. In exchange for her role, she received kickbacks.
Lee was among the last to plead guilty, according to announcements from the DOJ. It’s unclear how many coconspirators are still awaiting sentencing.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.