Anaheim Acupuncturist Sentenced to 30 Months in Federal Prison for Cheating Amtrak Out of $7M

A licensed acupuncturist was sentenced to two and a half years in federal prison on Tuesday for fraudulently billing Amtrak’s health care plan $7.1 million in unnecessary or unprovided acupunctures, massages and facials, authorities said.

Guiqiong Xiao Gudmundsen, aka “Kimi” Gudmundsen, a 53-year-old Anaheim Hills woman, was ordered to pay $2,683,903 in restitution to Amtrak, a national rail operator, according to the U.S. Attorney for the Central District of California.

Gudmundsen, who owned Healthy Life Acupuncture Center, pleaded guilty to one count of health care fraud and one count of money laundering in October.

From January 2008 until December 2015, Gudmundsen recruited Amtrak employees to visit her center that operated in Los Angeles and Riverside. She billed the Amtrak health care plan for acupuncture services that she knew were not being provided; for medically unnecessary services such as massages and facials; and for work-related injuries that she knew the plan did not cover, authorities said.

Gudmundsen also provided medical services to people who did not have Amtrak health care and then billed the plan for it under the name of actual plan participants, according to the U.S. Attorney’s Office. She also regularly waived co-payments, co-insurance and deductibles for participants, which the plan did not permit, authorities said.

In addition, Gudmundsen double billed other insurance plans and provided services to returning patients that she falsely billed as new patients in order to take advantage of higher reimbursement rates, the U.S. Attorney’s Office said.

Gudmundsen’s “entire business model was based on fraud, infiltrating all the services that she provided (and those she did not provide),” prosecutors wrote in their sentencing memorandum. “The Amtrak health care plan provides much-needed health care services to Amtrak union employees and their dependents. These types of fraud schemes increase the costs of such health insurance plans.”

During the course of the scheme, Gudmundsen billed Amtrak’s health care plan in amounts comparable to large research hospitals and medical institutions, even ranking above Johns Hopkins Hospital in 2013, court documents show.

Gudmundsen regularly funneled her fraudulent income into bank accounts opened in the names of her relatives and in the name of a shell company, authorities said.

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