San Jose Medical Supply reports insider breach; sues former employees and two competitors

There are some details I routinely look for in breach reports.  So when I saw a breach report yesterday that indicated the breach occurred in August 2011 and wasn’t discovered until June 27, 2013, it caught my eye.

According to a letter sent this week to affected customers and patients,  San Jose Medical Supply Company (SJMS) recently discovered a breach that had occurred when the business was under previous ownership.  In a letter to those affected, Jesille Kuizon, President of the company, explained that when the former owner of the firm died in August 2011, the company continued operating through its employees and agents under the supervision of trustees. In August 2012, the firm was bought from the former owner’s probate estate. The new owner “uncovered certain suspicious activity taken by the former employees, officers and/or agents of the prior owner, which may have compromised the security of customer’s health information. ”

In June, the firm confirmed  that there had been a breach that occurred between August 2011 and December 2011. The breach resulted in the unauthorized disclosure of the customers’ information.

None of the employees involved in or responsible for the are still employed by the firm and a civil  lawsuit was filed against them in Santa Clara Superior Court in April. Among the defendants in that case are two medical supply firms, Front Medical Supply and Baypoint Medical Supply.   In their notification letter dated July 17 and submitted to California’s Attorney General’s Office, SJMS writes to its customers:

We believe that these individuals disclosed your information to Front Medical Supplies, Inc. (“Front Medical”) and/or Living Medical Equipment, Inc. (“Living Medical”). You may have been contacted by Front Medical and/or Living Medical, and you may have received misleading information from them about San Jose Medical. Please note the following:

  • San Jose Medical has NEVER dissolved or filed bankruptcy. To the contrary, it continues to operate in the same location, and has continuously operated for over 20 years. San Jose Medical only operates under the name of “San Jose Medical Supply Co., Inc.” San Jose Medical Supply Co., Inc. DOES NOT operate under any other name and has NEVER changed its name to Front Medical, Living Medical or any other name
  • Front Medical Supply and/or Living Medical Supply ARE NOT and HAVE NEVER BEEN affiliated or partnered with San Jose Medical Supply Co., Inc.
  • San Jose Medical Supply Co., Inc. NEVER transferred or sold your health information, medical records, or prescriptions to Front Medical Supply and/or Living Medical Supply. These businesses obtained your information in violation of health privacy laws.
  • San Jose Medical Supply Co., Inc. NEVER authorized Front Medical Supply and/or Living Medical Supply to provide medical supplies to you, on our behalf, or as an extension of San Jose Medical Supply Co., Inc.

The PHI that may have been improperly disclosed included full name, date of birth, Social Security number, home address, Medi-Cal ID number, physician’s name and contact information, prescriptions, past invoices to SJMS, diagnosis, disability code, and type and quantity of medical supplies ordered from SJMS.

It is important to note that the allegations in the lawsuit are just that – allegations.  It is not clear why the lawsuit names Front Medical Supply and Baypoint Medical Supply, when the breach notification letter names Front Medical Supply and Living Medical.

All of the defendants, including the two medical supply firms, are represented by Tingley Piontkowski LLP, who have not responded to’s request for a statement by the time of this publication.


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