State Employee Who Inspected Rehab Clinics Indicted on Corruption Charges for Allegedly Taking Cash Bribes

LOS ANGELES—An employee of the California agency charged with coordinating alcohol and drug abuse programs across the state was indicted today on federal corruption charges for allegedly demanding more than $100,000 in bribes from the owners of two rehabilitation clinics that were seeking state certifications.

Gary Eugene Goethe, 45, of Sacramento, was named today in an indictment that accuses him of four counts of “honest services” wire fraud, four counts of extortion and two counts of bribery.

Today’s indictment follows Goethe’s arrest on July 9 by special agents with the Federal Bureau of Investigation as he was leaving a meeting where he allegedly accepted a $3,500 cash payment that was part of a $10,000 bribe he had negotiated. Goethe was initially charged in a criminal complaint, a charging document that is now superseded by the grand jury indictment.

“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 Thomas P. O’Brien. “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.

For the past year, Goethe allegedly solicited and accepted bribes from rehabilitation facility owners in exchange for his promise of approvals and other benefits. The indictment alleges that in one case Goethe 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 allegedly promised that, in exchange for cash bribery payments, he could “guarantee” that the clinics would be certified to provide mental health treatment services. Goethe allegedly demanded $92,000 in bribery payments from the owner.

In relation to another facility, Goethe is accused of revealing to the owner that the facility was being investigated by the California Department of Justice, but that, in exchange for 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 allegedly demanded $10,000 in bribe payments from the owner of this facility.

After being arrested last month, Goethe was freed on a $50,000 bond. He is scheduled to be arraigned on the indictment next Monday in United States District Court in Los Angeles.

The charge of “honest services” wire fraud carries a statutory maximum penalty of 20 years in federal prison. The charge of interference with commerce by extortion under color of official right also carries a maximum penalty of 20 years in prison. The charge of bribery concerning programs receiving federal funds carries a maximum penalty of 10 years in prison.

An indictment contains allegations that a defendant has committed a crime.

Every defendant is presumed innocent until and unless proven guilty.

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