State Employee Who Inspected Rehab Clinics Pleads Guilty to Corruption Charges for Taking Cash Bribes

LOS ANGELES—An employee of the California agency charged with inspecting alcohol and drug abuse programs across the state was convicted today following his plea of guilty to federal corruption charges for demanding more than $100,000 in bribes from the owners of two drug rehabilitation clinics.

Gary Eugene Goethe, 47, of Sacramento, pleaded guilty to four counts of extortion under color of official right and two counts of bribery.

Goethe was arrested on July 9, 2009, by Special Agents with the Federal Bureau of Investigation as he was leaving a meeting where he accepted a $3,500 cash payment that was part of a $10,000 bribe he had negotiated. Goethe's guilty pleas were accepted prior to the commencement of a jury trial that had been scheduled to begin on Tuesday, May 25, 2010.

“Whether they are employed by local, state or federal government, all public employees have a duty to properly serve the citizens who pay their salaries,” said United States Attorney André Birotte Jr. “Corruption by any public official undermines everyone’s opinion of government and challenges the fundamental concept of fair and equal treatment.”

Goethe worked for the California Department of Alcohol and Drug Programs (ADP) as a Drug Medi-Cal Monitoring Supervisor who traveled to alcohol and drug treatment clinics throughout California to inspect records and documentation related to Medi-Cal billings. ADP, which receives millions of dollars in funding every year from the United States government, is responsible for administering prevention, treatment, and recovery services for alcohol abuse, drug abuse, and problem gambling.

As part of his guilty pleas, Goethe admitted that he had solicited and accepted bribes from rehabilitation facility owners in exchange for his promises of approvals and other benefits. Goethe admitted that he told a clinic owner that he could help the owner obtain certifications that would allow the owner to expand service offerings to include mental health treatment. Goethe admitted having promised that, in exchange for cash bribery payments, he could “guarantee” that the owner's clinics would obtain certification to provide mental health treatment services. Goethe demanded $92,000 in bribery payments from the owner.

In relation to another facility, Goethe revealed to the owner that the clinic was being investigated by the California Department of Justice ("CalDOJ"), but that, in exchange for a cash bribe, Goethe could “help” the clinic owner by providing confidential information about the subjects and progress of the investigation, as well as steering CalDOJ away from the clinic. Goethe admitted having demanded $10,000 in bribe payments from the owner of this facility.

Goethe remains on $50,000 bond pending his sentencing. He is scheduled to be sentenced on December 13, 2010, in United States District Court in Los Angeles.

Each conviction for interference with commerce by extortion under color of official right carries a maximum penalty of 20 years in prison. Each conviction for bribery concerning programs receiving federal funds carries a maximum penalty of 10 years in prison. Goethe faces a maximum sentence of 100 years’ imprisonment and a maximum total fine of $1,500,000.

The case against Goethe was investigated by the Federal Bureau of Investigation.