No Vacancy – Just Empty Rooms

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Bethel, Alaska is not a very large community. However, with a population of around the mid-6,000s, it is actually the largest community in western Alaska, as well as the 9th largest in the entire state. Unfortunately, that status did not necessarily help the financial success for Bethel’s Tundra Suites hotel. Today’s “Fraud of the Day” focuses on the owner and an employee of Tundra Suites, who engaged in a flagrant Medicaid fraud scheme in an attempt to right the hotel’s struggling financials. Here’s how it worked.

Medicaid recipients who fly into Bethel, Alaska for medical appointments do not pay cash for things like food, hotel rooms and taxi fare. Instead they use vouchers, which local companies then submit to Medicaid for reimbursement. An employee of Tundra Suites decided to take advantage of this system in an attempt to help her boss’s struggling business. As a result, Tundra Suites began billing the government for Medicaid recipients who never actually stayed at the hotel. The owner allegedly did not know about the scheme for months.

When it comes to fraud, subtler schemes tend to last a bit longer than plainly obvious ones. That fact was apparently lost on the fraudsters at the Tundra Suites. On multiple occasions, Tundra Suites billed the government for more Medicaid recipients than there were even rooms in their hotel (a tad bit of a giveaway). According to charging documents, the hotel’s Medicaid billing increased from an average of $4,000 per month to an outrageous high of $57,000 for the month of December 2017 (again, subtlety does not seem to be the strong suit here).

As a result, both the owner and employee of the Bethel, Alaska hotel were charged with two felonies: medical assistance fraud and scheme to defraud.

Today’s “Fraud of the Day” is based on an article entitled, “Bethel’s Tundra Suites hotel charged with Medicaid fraud,” posted on on July 12, 2018.

The owner of Bethel’s Tundra Suites hotel has been charged with Medicaid fraud.

When Medicaid recipients fly to Bethel for medical appointments, they pay for their food, hotel rooms and cab rides with vouchers in lieu of payment. Local companies then use those vouchers to bill Medicaid for reimbursements. Tundra Suites’ owner, Chin S. Kim, age 58, is accused of billing the government for Medicaid recipients who never actually stayed at his hotel. Alaska’s Office of Special Prosecutions has also charged Tundra Suites employee Mi Ae Young, age 56, in the alleged scheme.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.