Owner of Oahu Physical Therapy Clinics Pleads Guilty to Health Care Fraud

HONOLULU - United States Attorney Clare E. Connors announced that Stephen Timothy Wells, 41, pleaded guilty today in federal court to executing a scheme to defraud health care benefit programs through the submission of false billings. Sentencing is scheduled for January 29, 2025, before U.S. District Judge Jill A. Otake.

According to court documents and information presented in court, Wells was the owner and operator of Oahu Spine and Rehab ("OSR"), a physical therapy clinic with locations in Kailua and Aiea. From July 2013 through early 2020, Wells submitted false claims for payment for physical therapy services to TRICARE, the health care program for United States military service members and their families, and Medicare. Wells admitted he directed OSR to submit claims to these health care benefit programs using the unique provider numbers of doctors, nurses, and physical therapists, thereby falsely stating that they had personally provided the physical therapy services to patients, when in fact, the services were provided by Wells's unlicensed staff members. These unlicensed staff members included massage therapists, athletic and personal trainers, and one individual who had no professional certifications whatsoever.

As part of the Plea Agreement, Wells stipulated that his scheme caused a loss of between $250,000 and $550,000 and agreed to pay total restitution in the amount of $392,157.20, with half to be paid before sentencing. The United States and Wells agreed that Wells should be sentenced to a term of between probation and two years in prison.

The case was jointly investigated by the Defense Criminal Investigative Service and the Office of Inspector General of the Department of Health and Human Services, and was prosecuted by Assistant United States Attorney Mohammad Khatib.