The owners and employees of a spa in San Jose have been charged with health insurance fraud after allegedly billing insurance companies and employers a total of $7 million for cosmetic services claiming them as chiropractic treatments. The Santa Clara County District Attorney’s Office and the California Department of Insurance began the investigation, codenamed “Operation Nail Polish,” in late 2012.
The investigation revealed fraudulent billing by San Jose Chiro Spa to insurance companies and large self-insured employers that resulted in over $7 million in losses. The spa, which offers services such as massages, facials, manicures, pedicures, and waxing, billed their clients’ insurance companies for these services, claiming them to be chiropractic treatments, the district attorney’s office said.
It is the largest medical billing fraud case to be prosecuted in this county, the district attorney’s office said in a statement. The owners of San Jose Chiro Spa and two employees are facing felony fraud charges. Chiropractor Tracy Thu Khac Minh Le, 39, and her husband Thanh Trung Tran, 38, are the owners of the spa.
Le and Tran, along with employees, Lillian Yenloan Be, 39, and Honggam Thi Tran, 37, all of San Jose, were arrested on May 21 and each have been charged with 11 counts of health care insurance fraud, the district attorney’s office said. The owners and employees are scheduled to be arraigned at 1:30 p.m. on June 4. If the defendants are convicted of these charges, they face a maximum of 24 years incarceration. “Non-therapeutic massages, facials, manicures and pedicures are great, but they are not medical treatments,” prosecutor Christopher Kwok said.
“Portraying them as medical treatments to get insurance reimbursement is a crime.” During the investigation, an undercover investigator went into the spa, located at 3078 Landess Ave. for manicures and pedicures. The employees took insurance information from the undercover investigator and proceeded to illegally charge the investigator’s insurance company for chiropractic treatments.
The undercover investigator received eight manicure and pedicure packages while the insurance company was charged more than $2,000, the district attorney said. Investigators determined that about 90 percent of the spa’s practice was fraudulently billed. Numerous comments posted on the spa’s online Yelp page reviewing the business said the only reason they chose the spa was because they could get free services such as massages and manicures covered by their health insurance. A Yelp reviewer, Jackie F. posted a comment in July 2013 that said, “The only reason I frequent this place is because they take my medical insurance which means free massages for me! Otherwise, I would probably go somewhere else.
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