Clinic owner sent to prison for orchestrating $15M Medicare fraud and kickback scheme

HOUSTON – The owner of a Houston-area mental health clinic has been sentenced for conspiracy to commit healthcare fraud, announced U.S. Attorney Alamdar S. Hamdani.

Gwendolyn Gibbs, 72, pleaded guilty Dec. 3, 2021.

U.S. District Judge Charles R. Eskridge has now ordered Gibbs to serve 84 months in federal prison to be immediately followed by three years of supervised release. At the hearing, the court heard additional evidence Gibbs fraudulently billed Medicare for services provided to vulnerable adults with intellectual disabilities who did not require mental health services. In addition, Gibbs was ordered to pay $8,680,380.42 in restitution to Medicare. In handing down the sentence, the court noted Gibbs’ role as leader, the length of the fraud scheme and her long history in the medical field as evidence she knew what she was doing was wrong.

“Gwendolyn Gibbs exploited vulnerable adults with intellectual disabilities and residents of group homes in order to defraud Medicare of millions of dollars,” said Hamdani. “Public resources for mental health services should go to the patients that actually need them, not to enrich criminal actors like Gibbs.”

Gibbs was the owner of Daybreak Rehabilitation Center. From 2007 until 2016, she submitted fraudulent claims for partial hospitalization program (PHP) services to Medicare that were not provided or not medically necessary. A PHP is a form of intensive outpatient treatment for severe mental illness. Daybreak patients, including individuals with intellectual disabilities, did not need PHP services. Gibbs admitted to falsifying medical records to make it appear that patients were sicker than they actually were.

Gibbs also paid kickbacks to owners of group homes and patient recruiters in exchange for referring Medicare beneficiaries to Daybreak. The owners of the group homes required their residents to attend Daybreak and, in exchange, Gibbs and her co-conspirators provided transportation, supervision and meals to the group home residents.

Charles Guidry Jr., 70, Houston, a manager at Daybreak and Gibbs’ ex-husband, was previously sentenced to 70 months imprisonment followed by three years of supervised release.

Gibbs will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

FBI, Department of Health and Human Services - Office of the Inspector General, Texas Attorney General’s Medicaid Fraud Control Unit and the Railroad Retirement Board-OIG conducted the investigation. Assistant U.S. Attorneys Kathryn Olson and Michael Day prosecuted the case.