Tan operated a sweeping fraud scheme that defrauded health insurance companies and evaded taxes from 2018 to 2023, according to court documents. The defendant submitted false claims to dozens of insurers including Aetna, Blue Cross Blue Shield, Cigna, and federal programs like Tricare and the Federal Employee Health Benefits Program. Major Alaska employers and organizations were among the victims, including the State of Alaska ($2.6 million), Alaska Communications Systems, BP Corporation, and ConocoPhillips Company.
The court found that Tan's fraud caused massive losses across the health care industry. 'The scope and duration of this fraud scheme demonstrates a calculated effort to exploit the health care system for personal gain,' Judge Gleason wrote in her sentencing order. The restitution amount of $16,771,260 reflects the total losses suffered by victims, with the largest single victim being the Internal Revenue Service at $4.2 million in unpaid taxes.
Tan initially faced nine criminal counts but pleaded guilty to health care fraud under 18 U.S.C. § 1347 and tax evasion under 26 U.S.C. § 7201. Counts 3 through 9 were dismissed on motion by the government as part of the plea agreement. The defendant also admitted to a criminal forfeiture allegation, requiring him to surrender property listed in his plea agreement to the federal government.
Under the terms of his probation, Tan must apply his Alaska Permanent Fund Dividend payments toward restitution and cooperate with the IRS to resolve his outstanding tax liability. He is also subject to location monitoring and must file accurate tax returns throughout his supervision period. The case highlights the government's continued crackdown on health care fraud schemes that cost taxpayers billions annually.