Fraud on the RISE

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Surgeon picking up surgical tool from tray. Surgeon is preparing for surgery in operating room. He is in a hospital.

All fraudsters are greedy, but some have an unquenchable drive to steal. Look no further than the California chiropractor, Joserodel Zavala Candelario, who scammed Medicare and TRICARE in one scheme, bilked Workers’ Compensation insurers in another, and threw in a side of tax evasion for good measure.

Candelario owned R.I.S.E. Medical Center (RISE), which offered an “integrated” approach to treatment, combining physical therapy with other treatments. (Because fraud was integrated throughout the practice.)

RISE didn’t have any physical therapists on staff, but Candelario falsified the billings to reflect physical therapy, when patients were receiving services from chiropractors, massage therapists, physical therapy aides, and an acupuncturist—services not covered by Medicare or TRICARE. (Whoops! Must have been an “honest” mistake.)

Meanwhile, patients didn’t get the physical therapy treatment they presumably needed. Instead, they received excessive diagnostic testing and durable medical equipment (DME) they didn’t need, in addition to substandard treatment.

Candelario also pressured RISE staff to cram in as many patients as possible, with up to 50 patients per provider daily. He further required them to bill for services even when patients didn’t show up for appointments. (Given his approach to “therapy,” the patients who didn’t show up arguably got better care than those who did.) This scheme resulted in more than $7.25 million in false and fraudulent bills, with Candelario receiving more than $3.45 million from TRICARE and another $37,843.04 from Medicare.

The fraudster also ran an illegal cross-referral scheme to get new Workers’ Compensation patients for RISE. (This guy was so greedy he probably petitioned Congress to establish insurance programs, so he’d have new insurers to scam.) Candelario prescribed services such as MRIs and DME to the patients referred to him (to be furnished by his co-conspirators), and used the same treatment plan for all patients, regardless of medical need, so he could fraudulently bill Workers’ Compensation insurers more than $6.6 million, of which he collected $771,000.

Finally, Candelario failed to pay taxes on the fraudulent funds – being “short” by $505,000 in just one year. On Jan. 21, 2020, Candelario pleaded guilty to conspiracy, conspiracy to commit healthcare fraud, and false statement on a tax return. Separately, he already pleaded guilty to concealing an event affecting an insurance claim, in violation of state law.

On April 12, 2021, he was sentenced to three years in federal prison. (But his real punishment is the financial hit.) The United States is also seeking restitution of all the payments he received from TRICARE and Medicare, and a personal money judgment of more than $1.3 million. 

Today’s Fraud of the Day comes from a press release from the U.S. Attorney’s Office for the Southern District of California, “San Diego Chiropractor Sentenced to Three Years in Prison for Multi-Million Dollar Workers’ Compensation, Medicare, and TRICARE Schemes,” dated April 13, 2021.

SAN DIEGO – Irvine resident Joserodel Zavala Candelario was sentenced in federal court yesterday to 36 months in federal custody for his participation in two huge health care fraud schemes, and for concealing income he received from those multi-million-dollar schemes.

According to court documents, Candelario was a chiropractor licensed by the State of California Board of Chiropractic Examiners. He was the owner of Candelario Chiropractic, a Professional Corporation, and R.I.S.E. Medical Center, a Professional Corporation, dba R.I.S.E. Wellness Center (“RISE Wellness”), which operated at multiple locations in the Southern District of California, including at 5030 Bonita Road, Suite B, in Bonita and at 3231 Waring Road, Suite N, in Oceanside.

 

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.