Lakewood Oncologist Must Pay $3.1 Million For Defrauding Federal Government

A Lakewood oncologist has agreed to pay the federal government $3.1 million for significantly overcharging for cancer treatment medications over a three-year period.

Dr. Alfred Chan agreed to the settlement, which is more than three times the amount he and his wife defrauded the government for, the U.S. Attorney's Office in Seattle announced Thursday.

According to the department, Chan and wife Judy intentionally inflated claims to Medicare, TRICARE and other federal health care programs - which ended up costing the government more than $1 million - from April 2006 to April 2009.

“Dr. Chan and Judy Chan blatantly and persistently defrauded the government of more than a million dollars and traded the safety of cancer patients for their own personal gain,” said U.S. Attorney Jenny A. Durkan. “They continue to try to avoid criminal sanctions by remaining outside the U.S.”

One of Chan's former employees, Ruth Ruckman, alerted the government to Chan's actions. She told investigators that she had observed Chan and his wife routinely billed federal healthcare programs for twice the amount of cancer treatment drugs actually administered to his patients, sometimes even more.

The couple then destroyed records and falsified patients’ medical records to conceal the fraud. Ruckman provided investigators with Chan’s treatment orders, which showed the actual dosages of drugs administered to certain patients, and the invoices, which showed how much he had overbilled for the treatments.

After learning he was being investigated, the Chans attempted to sell, transfer, and conceal millions of dollars in assets in an ultimately unsuccessful attempt to prevent the government from recovering its overpayments, according to the U.S. Attorney's Office.

In February 2011, the Chans fled to Taiwan. A grand jury sitting in the Western District of Washington has returned a criminal indictment against Alfred and Judy Chan relating to their fraudulent conduct.

Under the False Claims Act, Ruckman - the whistleblower - is entitled to $620,000 of the $3.1 million that the Chans will pay.