FBI agents search chiropractic clinic; fraud alleged in health-care billing

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A throng of FBI agents searched the Alderwood Back & Neck Pain Clinic yesterday morning as part of an investigation into allegations of health-care-billing fraud.

A man at the Lynnwood chiropractic clinic identifying himself as Patrick Osborne, who is listed as the clinic's owner with the state Department of Revenue, would not comment yesterday.

Patients with appointments at the clinic arrived yesterday to find it closed, with a sign on the door reading: "Sorry, we are closed today due to Dr. illness. Reg. office hours Sat. 9-11AM."

The building's front door was unlocked, however, and about a dozen men and women were inside, including a man who identified himself as an FBI official. He would not say why he was there.

One source confirmed yesterday that the investigation was focusing on allegations of health-care-billing fraud. FBI officials confirmed that a search warrant had been executed but would not discuss the nature of the investigation.

"Nor are we saying who the bad guys are," FBI spokesman Ray Lauer said. Still others referred calls to the U.S. Attorney's Office, where officials also declined to comment.

Several patients apparently had not been notified of the closure, either driving up to the building and leaving when they saw the sign or lingering in the parking lot, trying to figure out what was going on.

"I'm surprised to see all these FBI agents," said Ron Peluso, an Edmonds resident who's been a patient at the clinic for almost a decade.

When he asked some women smoking by the clinic's back door why it was closed, they wouldn't tell him, saying only that they "tried to call everybody and let them know."

Peluso didn't have an appointment but said he and his wife often go as drop-in patients during regular hours.

In recent years, the Justice Department has prosecuted several local chiropractors for billing fraud, including the 1998 prosecution of Dr. Gary Rock of Tacoma, who served four months in prison for fraud.