The owners and employees of San Jose Chiro Spa on Landess Avenue in San Jose  have been arrested and charged with health insurance fraud,  after an investigation revealed  they were billing insurance companies thousands of dollars for chiropractic treatments when in reality they were providing free “mani-pedis.”

“Operation Nail Polish,” a  year-long investigation by the Santa Clara County District Attorney’s Office and the California Department of Insurance, turned up  fraudulent billing to several insurance companies and large self-insured employers resulting in more than  $7,000,000 in losses.  It is the largest medical billing fraud case to be prosecuted in Santa Clara County.

The four, arrested  on May 21, 2014, are 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.  The four are  each charged with eleven felony counts of health care insurance fraud.   They are scheduled to be arraigned  June4, 2014.   . If convicted of all charges, the defendants face a maximum of 24 years in prison.

The investigation began in late 2012. An undercover investigator went into the spa numerous times for manicures and pedicures. The employees took insurance information and are accused of illegally charging  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.

“Our California Statewide Law Enforcement (CSLEA) members who are investigators in the Department of Insurance work closely with local district attorneys’ offices to uncover these types of crimes,” said CSLEA President Alan Barcelona.  “I am appalled by this complete disregard for the law, disregard for what insurance is really for and disregard for the law-abiding citizens of this state who end up paying higher insurance premiums because of their fraudulent acts.”

“Insurance crimes are a multi-billion dollar drain on California’s economy,” state Insurance Commissioner Dave Jones said. “Insurance fraud is not a victimless crime—we all pay for these crimes through higher insurance premiums. We will continue our work and our partnerships with district attorneys to bring criminals to justice.”