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San Jose Spa Owners, Employees Facing Insurance Fraud Charges In ‘Operation Nail Polish’ Investigation

SAN JOSE (CBS/AP) — Prosecutors say a popular San Francisco Bay Area spa cost insurance companies and employers more than $7 million by falsely billing manicures and pedicures as chiropractic treatments.

The two owners of San Jose Chiro Spa and two employees are each facing 11 counts of health care insurance fraud. Santa Clara County prosecutors say they were arrested on Wednesday.

The investigation, dubbed “Operation Nail Polish,” began in late 2012. Prosecutors say an undercover investigator went into the spa numerous times for manicures and pedicures. Employees allegedly took the investigator’s insurance information and then charged the insurance company for chiropractic treatments.

Prosecutors say about 90 percent of the spa’s business was billed fraudulently.

No one picked up the phone at the spa on Thursday. The defendants are scheduled to be arraigned on June 4.

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