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United States Attorney Phillip A. Talbert announced that a federal grand jury returned an 11-count indictment against Anthony Lazzarino, 66, former Chief of Podiatry for the VA’s Northern California Health Care System, and Peter Wong, 58, founder and CEO of Sacramento based Sunrise Shoes and Pedorthic Service, charging them with health care fraud, conspiracy to pay and receive kickbacks on medical referrals, and conspiracy to commit wire fraud.

Lazzarino was a 1982 graduate of Kent State University, College of Podiatric Medicine. Lazzarino began working at the Veterans Health Administration in 2007 with a starting salary of $122,379. California records show his license status as “canceled.”

Sunrise Shoes claims on its website to provide services under most insurance plans, including workers’ compensation, and specifically the State Compensation Insurance Fund.

According to court documents, between March 2008 and February 2015, Lazzarino and Wong engaged in a scheme to defraud the VA by billing the Veterans Health Administration for custom work and services that were prescribed but not supplied in shoes delivered to veterans.

In addition, Lazzarino referred patients directly to Sunrise in violation of VA policy, and agreed with Wong to offer kickbacks in return for such referrals.

Finally, Lazzarino, Wong, and Jai Aing Chen, who separately pleaded guilty on December 6, 2016, agreed to make materially false statements and omissions to the VA regarding where the shoes were manufactured, in the course of applying for an estimated $59 million contract.

This case is the product of an investigation by the Department of Veterans Affairs, Office of Inspector General, the Department of Veterans Affairs Police Service, and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorney Matthew M. Yelovich is prosecuting the case.

If convicted, Lazzarino and Wong face a maximum statutory penalty of 10 years in prison and a $250,000 fine for each health care fraud count, and five years in prison and a $250,000 fine for each of the two conspiracy counts.