Source: US Bureau of Labor Statistics
Source: US State of California
Defendant Helped Clients Submit Fraudulent Disability Applications and Paid Physician To Certify Non-Existent Disabilities In Multi-Million Dollar Fraud Scheme
SAN FRANCISCO – Linda Nguyen was sentenced to two years in prison for her role in a multi-million dollar mail fraud conspiracy, announced United States Attorney David L. Anderson and Federal Bureau of Investigation, Special Agent in Charge John F. Bennett. The sentence was handed down by the Hon. Phyllis J. Hamilton, Chief U.S. District Judge.
Nguyen pleaded guilty to the charge on July 17, 2019. According to the plea agreement, Nguyen, 68, of Union City, engaged in a scheme to defraud California’s State Disability Insurance (SDI) program. The SDI program is designed to provide partial wage replacement benefits to eligible California workers who are unable to work due to a non-work-related illness, injury, or pregnancy. To receive SDI benefits, a claimant must file a claim for benefits supported by a Physician/Practitioner Certification attesting to the claimant’s disability. According to the plea agreement, Nguyen admitted that from January 2013 until January 2019, she agreed with a licensed physician and others to commit mail fraud by defrauding California’s SDI program. Specifically, Nguyen admitted she helped non-disabled persons prepare and submit fraudulent applications and certifications for SDI benefits. In exchange for her services, Nguyen charged the non-disabled SDI applicants a fee equal to 10% of the SDI benefits that they received. In addition, she paid the physician for each certification he completed for the fraudulent application.
Nguyen’s plea agreement contains four examples of individuals for whom she completed fraudulent applications. The agreement further describes how Nguyen paid a physician to complete and sign the practitioner disability certifications even though the applicants were never treated by the physician. Nguyen acknowledged in the agreement that the total loss attributable to the fraudulent scheme in which she participated is estimated to be between $3,500,000 and $9,500,000.
A federal grand jury indicted Nguyen on January 29, 2019, charging her with one count of conspiracy to commit mail fraud, in violation of 18 U.S.C. § 1349, and one count of substantive mail fraud, in violation of 18 U.S.C. § 1341. Nguyen pleaded guilty to the conspiracy count and the substantive mail fraud count was dismissed at sentencing.
In addition to the prison term, Chief Judge Hamilton ordered Nguyen to serve a three year term of supervised release, to begin at the end of the prison term, and to pay restitution.
Special Assistant U.S. Attorney Christopher Vieira is prosecuting the case with the assistance of Alice Pai. The prosecution is the result of an investigation by the FBI with assistance from the Social Security Administration, Office of Inspector General and the California Employment Development Department.