Tattoo removal business owner pleads guilty in healthcare fraud involving paraplegics

The owner of a tattoo removal business based in South Gate has pleaded guilty to federal charges related to a health care fraud scheme involving paraplegics and tax evasion. Joseph Tusia, 60, from Leominster, Massachusetts, admitted guilt in a two-count information for health care fraud and tax evasion.

According to the plea agreement, Tusia ran a laser tattoo removal business in South Gate along with ten durable medical equipment supply companies (DMEs) across California, Nevada, and Massachusetts. He controlled these businesses but kept his name off bank accounts and state registrations to avoid taxes.

On December 30, 2015, Tusia and an accomplice submitted an application for a small group health insurance plan to Anthem Blue Cross ("Anthem"). The plan was meant for permanent full-time employees. However, Tusia falsely listed nine individuals as full-time employees eligible for coverage under this plan; none were actual employees or eligible under the terms.

Tusia identified these individuals from his circle of friends and associates who were paraplegic and needed medical supplies. He expected them to buy their supplies from DMEs he controlled. Between March 2016 and June 2020, fraudulent claims were submitted to Anthem by Tusia and others on behalf of these DMEs. These claims led Anthem to pay approximately $1,731,215 to the DMEs controlled by Tusia.

In addition to health care fraud, Tusia admitted that he failed to report over $1.57 million in income received from the DMEs between 2017 through 2020. He acknowledged taking steps like creating DMEs and opening bank accounts in associates' names to evade taxes owed to the IRS.

United States District Judge George Wu has scheduled sentencing for December 5th. At that time, Tusia could face up to ten years in federal prison for health care fraud and five years for tax evasion.

The case is being investigated by the United States Department of Labor – Employee Benefits Security Administration, FBI, and IRS Criminal Investigation. Assistant United States Attorney Jeff Mitchell is prosecuting this case.