The owners and employees of a popular San Jose spa have been sentenced for health insurance fraud, after an investigation showed that they were billing insurance companies thousands of dollars for chiropractic treatments when in reality they were providing free “mani-pedis.”
Code named “Operation Nail Polish,” the year-long investigation by the Santa Clara County District Attorney’s Office and the California Department of Insurance revealed fraudulent billing to several insurance companies and large self insured employers resulting in over $7,000,000 in losses. It is the largest medical billing fraud case to be prosecuted in this county.
The investigation began in late 2012. An undercover investigator went into the Landess Avenue spa numerous times for manicures and pedicures. The employees took insurance information and then illegally charged the investigator’s insurance company for chiropractic treatments. The undercover investigator received eight free “mani-pedis.” The insurance company was charged more than $2,000. The investigation uncovered that this illegal practice was being used for many other clients. The investigation estimated that about 90 percent of the spa’s practice was fraudulently billed.
The owners of San Jose Chiro Spa and two employees. Chiropractor Tracy Thu Khac Minh Le, 39, her husband Thanh Trung Tran, 38, and employees, Lillian Yenloan Be, 39, and Honggam Thi Tran, 37, all of San Jose, were arrested on May 21, 2014 and were each charged with eleven counts of health care insurance fraud.
On July 1, 2016, Tracy Le was sentenced to serve two years in county jail and to 24 years’ formal probation. Lillian Be was sentenced to serve six months in county jail and to 12 years’ formal probation. Honggam Tran was sentenced to serve 10 months in county jail and to 24 years’ formal probation. The three defendants were also ordered to pay $508,631.40 to Blue Shield of CA, $68,141.04 to HealthComp, $858,448.39 to Aetna, $2,752,501.37 to Optum, $3,117,813.95 to Anthem Blue Cross, and $2,427.79 to the Santa Clara County District Attorney’s office.
“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.”