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Press Release

San Diego Chiropractor Sentenced to Three Years in Prison for Multi-million Dollar Workers’ Compensation, Medicare, and TRICARE Schemes

For Immediate Release
U.S. Attorney's Office, Southern District of California

Assistant U. S. Attorney Valerie H. Chu (619) 546-6750


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. 

On January 21, 2020, the defendant pleaded guilty to a three-count superseding information, charging Conspiracy in violation of 18 U.S.C. § 371, Conspiracy to Commit Health Care Fraud in violation of 18 U.S.C. § 1349, and False Statement on Tax Return in violation of 26 U.S.C. § 7206(1).  Separately, the defendant has been charged and has pleaded guilty in San Diego Superior Court case SCD281328 to Concealing an Event Affecting an Insurance Claim, in a violation of California Penal Code 550(b)(3).

The government’s sentencing papers reflect that, between approximately 2012 and July 2016, Candelario carried out a scheme to defraud Medicare and TRICARE out of millions of dollars by using physical therapy codes to bill for supposed physical therapy services performed on patients by individuals who were not licensed to provide physical therapy, including chiropractors, massage therapists, physical therapy aides, and an acupuncturist.  As a result, patients who thought they were receiving medical treatment were instead receiving substandard care, all so Candelario could bill Medicare and TRICARE. 

Candelario and his co-conspirators told patients that RISE Wellness offered an “integrated” approach to wellness, to convince patients to accept physical therapy, acupuncture, chiropractic, and diagnostic services at RISE Wellness, in order to fraudulently bill for non-covered services provided by unauthorized individuals, and collect as much money as possible from health care benefit programs. 

Candelario specifically targeted TRICARE beneficiaries as patients, despite knowing that TRICARE did not cover many of the services rendered by providers at RISE Wellness. The main page for RISE Wellness’s website made this goal plain.  It featured a photograph of an individual in a military uniform, saluting, with the message, “Supporting spinal health . . . You’ve only got one spine. Take great care of it with supportive chiropractic care,” even though TRICARE, the DoD health care program for uniformed service members, did not cover chiropractic treatment.

Once patients came in the door, the defendant pushed his staff to conduct diagnostic tests on every patient, regardless of medical necessity, to increase billing and payment, and he also demanded that staff meet quotas for the minimum number of diagnostic tests, and recommendations for durable medical equipment, or DME, massages and other services, regardless of whether specific patients needed the items and services. He also imposed quotas for the minimum number of patients with specific types of insurance coverage at RISE Wellness, e.g., “60 Tricare patients per day,” regardless of whether those patients needed treatments.

For example, on June 6, 2014, Candelario instructed a staff member, “I need you to do 5 axonii [diagnostic tests] a day no matter what for now on.”  The following month, on July 7, 2014, Candelario texted, “OK team you are receiving 2 new diagnostic testing devices this month. I need 20 patients to be tested on each one this month no matter What [sic].”

Defendant then, knowing that TRICARE and Medicare did not pay for chiropractic, acupuncture, massages, and other services, mischaracterized those services as physical therapy in bills submitted to TRICARE and Medicare. 

To increase billing and payment, the defendant pushed the schedulers to cram in as many as 50 patients per day for each provider.  He complained when staff fell short of this goal, noting, on June 11, 2015, certain “front desk issues” including:  “No[one] has called any patients to fill empty slots in provider schedules or grab patients in lobbies to put into provider schedules.”

Candelario fired or marginalized staff who disagreed with his efforts to prescribe, recommend, provide, or bill in a manner primarily intended to increase the billing and payment to RISE Wellness, and contrary to Medicare and Tricare rules and the medical need of the patients. On October 1, 2015, Candelario instructed that the chiropractors were “not allowed to treat” patients unless they first prescribed X-rays and three other diagnostic tests, plus DME. Eventually, on October 19, 2015, Candelario informed a co-conspirator, “I am finding it very difficult what needs we have [to retain the PA] moving forward.”  About a week later, the PA was fired.

If a patient failed to show up for an appointment, Candelario directed staff to bill the health care benefit program for the visit, even though no visit had occurred and no service had been provided.  For example, on March 9, 2015, Candelario wrote, about late reimbursements, that “the only solution is to start billing the missed appointments like i asked following the system.”

It was part of the scheme that, using the mean and manners described above, and others, the co-conspirators submitted and caused to be submitted at least $7,260,327.20 in false and fraudulent bills to TRICARE and Medicare. Of those fraudulent bills, TRICARE paid a total of $3,450,596.43 and Medicare paid $37,843.04. 

In addition, between March 2012 and November 2015, Candelario carried on an unlawful cross-referral scheme, in which he would receive new Workers’ Compensation (“WC”) patients for RISE Wellness.  In return for new patients, Candelario agreed to meet a quota for the “value” of ancillary services and DME he was expected to prescribe for each patient sent to him by co-conspirators, with a “value” -- such as $30-$50 per MRI referral -- set by those conspirators.  As part of the scheme, Candelario, who could function as a WC primary care provider, dictated the same treatment plan for all WC patients, regardless of their individual medical needs, so he could fraudulently bill WC insurers.   The defendant admitted that he violated his duty of honest services to his patients.  He received approximately 529 new WC patients as a result of the scheme, and he submitted approximately $6,605,364 in bills to insurers for services rendered to those patients. Of those billed amounts, he was paid $771,000 by WC insurers

In addition to fleecing taxpayer-funded government programs out of millions of dollars, Candelario failed to pay his fair share of taxes on the funds he fraudulently took, resulting in $505,000 in tax losses just for tax year 2013. 

Judge Bashant credited the rehabilitative efforts the defendant has made since his conviction to improve his circumstances.  Statements in sentencing papers and in court reflect that the defendant has been teaching as an adjunct instructor at West Coast University, Canyon College, Santa Ana College, Orange Coast College, and National University, in such topics as human anatomy, human physiology, biology, Medical Ethics and Medical Billing. But in aggravation, the Court noted that Candelario “put profits over the medical needs of patients,” which warranted punishment. 

“With so many health care systems and personnel strained due to the pandemic, we cannot afford the financial and physical costs of fraud,” Acting U.S. Attorney Randy Grossman noted. “Doctors are especially culpable as they are violating the sacred trust they should have with their patients. We are working hard every day to protect patients, taxpayers and ratepayers who are being exploited by those members of the medical community who prefer purchasing power over principle.”  Mr. Grossman commended the work of AUSAs Valerie H. Chu and Michelle Wasserman, forensic auditor Robbin Ganicliffe, and paralegal Joan Carter, and the case agents from the FBI, DCIS, and IRS-CI.

“With this sentence, the defendant has now been held accountable for the years of lies and deceit in defrauding our healthcare system,” said FBI Special Agent in Charge Suzanne Turner. “Let this sentence serve as a warning to those who intentionally try to line their pockets through fraud schemes rather than provide the honest service and care people deserve.” 

The defendant requested a delay of the self-surrender date until after grades are due to be submitted for the current school term he is teaching.  The defendant is scheduled to self surrender on or before July 14 at noon.  A hearing to address forfeiture and restitution will be held on May 19 at 2 p.m.  The United States is seeking restitution of $3,450,596.43 to TRICARE, $37,843.04 to Medicare, and a personal money judgment of $1,300,899.63. 

DEFENDANT                                               Case Number 18CR3057-BAS, 18CR3058-BAS                

Joserodel Zavala Candelario                          Age: 48                                   Irvine, CA


Conspiracy – Title 18, U.S.C., Section 371

Maximum penalty: 5 years’ imprisonment and $250,000 fine

Conspiracy to Commit Health Care Fraud – Title 18, U.S.C., Section 1349

Maximum penalty: Ten years’ imprisonment and $250,000 fine

Subscribing to a False Tax Return - 26 U.S.C. §7203(1)

Maximum penalty: Three years’ imprisonment and $100,000 fine


Federal Bureau of Investigation

Defense Criminal Investigative Service

Internal Revenue Service – Criminal Investigations

California Department of Insurance

Updated April 13, 2021

Health Care Fraud
Press Release Number: CAS21-0413-Candelario