KRDO uncovers license loophole, prompting state action

Cheat sheets, rigged tests, falsified credentials -- they're all becoming big problems in the massage therapy industry. Illegitimate masseuses are getting licensed by cheating the system.

We're seeing it right here in Colorado, but we have found that state has little to no oversight.

Under Colorado law, any person practicing massage therapy is required to be licensed with the state. In order to get that license, it's required the individual passes a state-administered exam. But according to our investigation, hundreds or possibly even thousands in Colorado don't take the exam, or they cheat on it.

The problem: the state agency tasked to oversee this issue doesn't have the statutory authority to fix the problem.

It was July 16, 2015, when Jing Song graduated from the International Institute of Cosmetics, a beauty school that licensed massage therapists in Colorado.

"This is my license, it says massage therapy," said Song, staring at her license certificate.

But today, that school no longer exists.

It's one of three that shut down following investigations uncovering evidence instructors were falsifying credentials. According to records from the Department of Regulatory Agencies, or DORA, Song is one of 66 people in the state that graduated from one of these reported 'fake' schools before they were terminated.

"Did you cheat on the exam?" Reporter Stephanie Sierra asked Song.

"No. No," Song said.

While Song tells us she didn't cheat, she admits many of her former classmates did.

"We can search Google, you know, the website from the government, the questions is similar there," said Song.

A similar issue of cheating was uncovered in a federal indictment by the Department of Justice back in late May and early June. According to the indictment, two instructors from Majestic Vocational School in Aurora were accused of falsifying credentials and creating cheat sheets with answers to the state license exam translated in Chinese.

"We find that they don't appear to be qualified that they don't have the background that would show they are massage therapists and would have gone through this rigorous education program," said Trevor Vaughn, who works with Aurora's Tax and Licensing Department.

Vaughn assisted with legislation that allowed the city to eliminate nearly every illicit spa in just over a year.

"This is a clear problem these instructors are licensing people with little to no experience in massage therapy," Sierra said during the interview.

"Yes, it's very frustrating and that's what we've seen almost universally with the places we suspect of doing prostitution or illicit activities," said Vaughn.

To put it in perspective, of the 19 parlors shut down in Aurora for illegal activity, Vaughn found nearly every therapist fronting the business graduated from a fake school.

"It's concerning when they're able to get licenses and they have no qualifications," Vaughn said.

And what may be even more concerning is under Colorado law, the licenses issued from these fake institutions still remain valid with the state.

So we brought this issue to DORA's Director of External Affairs, Nathan Batchelder.

"One of the ways we're committed to our mission is by making sure candidates for licensure actually meet the requirements set forth in law," said Batchelder.

Yet, the state agency doesn't have a review process in place to verify licenses issued from schools that were shut down for fraud.

"Some consider this a flaw in oversight. As the investigating agency, how do you plan to address this?" we asked.

"I think it's important to understand that," Batchelder said before pausing. "Maybe I don't understand your question ... is it a flaw in terms of?"

"As far as, they're not verifying those particular licenses, I mean no one is taking them away," Sierra said.

"Right. And I think that's why we're open to conversations and recommendations from the community on any kind of enhanced authority or regulatory purview," said Batchelder.

The keyword is "enhanced authority" which would require legislative help. That's why we took this issue to State Sen. Paul Lundeen (R-Monument).

"We need to have some ability to claw that license out, or at least question it," Lundeen said. "This will be the next step, we need to do something about closing this loophole."

A crucial change, one we can hope to see this next legislative session.

To reiterate, DORA doesn't have the statutory authority to verify licenses issued from these fake schools. But following our interview, the agency tells our team they are open to discussion on potential legislation to address this problem.