Former hospital president sentenced to 45 years in prison for fraud

Scheme went on for more than six years, feds say

Former Riverside General Hospital President Earnest Gibson III and two accomplices, including his son, were sentenced to prison on Tuesday for participating in a $158 million Medicare fraud scheme.

Under the terms of the sentences:

  • Gibson III was sentenced to 45 years in prison and ordered to pay $6.8 million in restitution.
  • His son, Earnest Gibson IV, was sentenced to 20 years and ordered to pay $7.5 million.
  • Regina Askew, a group-home owner also convicted of fraud in the scheme, was sentenced to 12 years and ordered to pay $46.3 million.

Background on the case

A federal jury in October found Gibson III and three others guilty of conspiracy to commit health care fraud, conspiracy to pay kickbacks, and additional counts of paying and receiving illegal kickbacks.

Specifically, Gibson III, his son, and two others were found guilty of operating a scheme to recruit psychiatric patients to an inpatient care program that was little more than a "sham," according to federal prosecutors.

The elder Gibson allegedly used kickbacks and other illegal tactics to bring patients from group care homes to Riverside for treatment. At Riverside, the patients were allegedly given minimal or no treatment, while the hospital collected millions in Medicare payments from the government.

The FBI investigation that led to the convictions found the scheme operated from 2005 to 2012.  

Experts: Gov't campaign for EHRs has made fraud easier

"For over six years, the Gibsons and their co-conspirators stuck taxpayers with millions in hospital bills, purportedly for intensive psychiatric treatment. But the 'treatment' was a sham—some patients just watched television all day, others had dementia and couldn't understand the therapy they supposedly received, and other patients never even went to the hospital at all," Assistant Attorney General Leslie Caldwell said in October.

The elder Gibson's attorney argues that his client was deceived by his subordinates and knew nothing of the fraud.

According to an October release from the Department of Justice, 10 people have now been convicted for their roles in the fraud scheme at Riverside.

Reaction to sentencing

Gibson III's lawyer Dick DeGuerin says he is unhappy with the federal sentencing, claiming the guidelines were applied in "such a harsh manner."

He adds, "Perhaps more importantly I'm frustrated with the government's efforts to prosecute criminally violations of policy and procedures rather than real criminal acts." For instance, he says, "It seems to me that the partial hospitalization program is fraught with traps for the unwary where mere failure to follow procedures can end up in criminal court, things that would ordinarily be handled by either a refund or a civil penalty" (Schenker, Modern Healthcare, 6/9 [subscription required]).

The takeaway: A former Houston hospital president was sentenced to 45 years in prison and must pay almost $7 million in restitution for a long-running fraud scheme.

Make sense of the changing fraud and abuse landscape

The Obama Administration has taken several steps to intensify its enforcement activities, including recent amendments to the False Claims Act and unprecedented coordination between the Department of Justice and the Department of Health and Human Services.

In this webconference, we help you make sense of the changing fraud and abuse landscape.

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