Federal Court Sentences Southern California Acupuncturist After U.S. Department of Labor Finds Healthcare Fraud

LOS ANGELES, CA – After an investigation by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), the U.S. District Court for the Central District of California has sentenced Kimi Gudmundsen – owner of Healthy Life Acupuncture Center in Los Angeles and Riverside, California – to 30 months in prison and ordered her to pay $2,683,903 in restitution for defrauding Amtrak’s healthcare plan. 

Investigators found that Gudmundsen engaged in a scheme to defraud Amtrak’s healthcare plan by submitting fraudulent medical claims for medically unnecessary procedures, for services not rendered and for services provided to non-Amtrak healthcare plan participants. Healthy Life Acupuncture Center billed over $7.1 million to the Amtrak healthcare plan from January 2008 to December 2015. Of that billed amount, the plan paid approximately $4 million.

As part of a plea agreement, Gudmundsen pleaded guilty in October 2019 to one count of healthcare fraud and one count of money laundering. 

The investigation revealed that Gudmundsen recruited and regularly waived co-payments and co-insurance requirements for Amtrak employees to visit Healthy Life Acupuncture Center, then billed the Amtrak healthcare plan for acupuncture, massages and facials that the center did not legitimately provide or were medically unnecessary. Gudmundsen fraudulently billed for treatments for work-related injuries that she knew the plan did not cover by instructing plan participants to alter intake paperwork to disguise their reasons for the visits. Gudmundsen also fraudulently billed for services provided to non-Amtrak healthcare participants by billing under the name of Amtrak healthcare participants. She laundered the illicit gains of her scheme through bank accounts opened in the names of a shell company and family members without their knowledge.      

“Healthcare fraud increases the cost of healthcare for everyone,” said Employee Benefits Security Administration Regional Director Crisanta Johnson, in Los Angeles, California. “EBSA will continue to work vigorously with our law enforcement partners to combat fraud involving health plans.”

EBSA, Amtrak’s Office of the Inspector General and the IRS–Criminal Investigation jointly investigated the case; and the U.S. Attorney’s Office in the Central District of California prosecuted the case. 

Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa

EBSA’s mission is to assure the security of the retirement, health and other workplace related benefits of America's workers and their families. EBSA accomplishes this mission by developing effective regulations; assisting and educating workers, plan sponsors, fiduciaries and service providers; and vigorously enforcing the law.

The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.

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