$15M Medicare Swindle: Clinic Owner Sentenced to 84 Months

In a brazen scam that left taxpayers footing the bill, Gwendolyn Gibbs, 72, the owner of a Houston-area mental health clinic, has been sentenced to 84 months in federal prison for orchestrating a $15 million Medicare fraud and kickback scheme.

Gibbs, who pleaded guilty on December 3, 2021, was ordered to serve 84 months in federal prison, followed by three years of supervised release. The court also ordered her to pay $8,680,380.42 in restitution to Medicare, a sum that reflects the depths of her greed.

The scheme, which spanned from 2007 until 2016, involved Gibbs submitting 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, but Gibbs’ patients, including individuals with intellectual disabilities, did not need such services.

Gibbs also paid kickbacks to owners of group homes and patient recruiters in exchange for referring Medicare beneficiaries to her clinic, Daybreak Rehabilitation Center. 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, a manager at Daybreak and Gibbs’ ex-husband, was previously sentenced to 70 months imprisonment followed by three years of supervised release. It’s clear that Gibbs was the ringleader of this operation, and her long history in the medical field should have served as a warning sign to authorities.

U.S. Attorney Alamdar S. Hamdani called Gibbs’ actions “outrageous” and said, “Public resources for mental health services should go to the patients that actually need them, not to enrich criminal actors like Gibbs.” The investigation was conducted by the 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. Assistant U.S. Attorneys Kathryn Olson and Michael Day prosecuted the case.

Gibbs will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future. Her crimes are a stark reminder of the importance of holding accountable those who seek to exploit the most vulnerable members of our society.