Houston-Area Physician and Local Businessman Charged in Diagnostic Testing Fraud Scheme

HOUSTON—Dr. Donald Gibson, II, 56, of Sugarland, Texas, and Sunday Joseph Edem, 53, of Richmond, Texas, have been arrested for health care fraud and conspiracy to commit health care fraud relating medically unnecessary diagnostic testing and physical therapy, United States Attorney Kenneth Magidson announced today.

Both defendants were arrested without incident this morning and are expected to make an initial appearance tomorrow before U.S. Magistrate Judge Mary Milloy.

According to the indictment, returned Thursday, May 17, 2012, and unsealed today upon their arrests, Gibson ordered, prescribed, and authorized medically unnecessary diagnostic tests and other procedures, which included allergy tests, pulmonary function tests, vestibular tests, urodynamic tests, and physical therapy, among others. These services were then billed to Medicare and Medicaid for payment under Gibson’s billing number.

From January 2007 through January 2012, Gibson allegedly caused more than $19.4 million in medical claims to the Medicare and Texas Medicaid Programs. As a result, Medicare deposited approximately $8.5 million into a bank account owned and controlled by Gibson.

The indictment also alleges Edem operated medical clinics under the names of other individuals to conceal his financial interest in the businesses. Edem and Gibson allegedly conspired with one another to cause the submission of false claims to the Medicare and Medicaid programs and share in the proceeds. Gibson and Edem paid patient recruiters for referring Medicare/Medicaid beneficiaries, according to the indictment, and also paid Medicare beneficiaries for showing up at the medical clinics.

This case is the result of a joint investigation involving multiple federal and state agencies, including agents and investigators of the Railroad Retirement Board, Secret Service, Drug Enforcement Administration, FBI, the Texas Attorney General’s Medicaid Fraud Control Unit, and U.S. Department of Health and Human Services-Office of Inspector General. Special Assistant U.S. Attorney Justin Blan and Assistant U.S. Attorney Andrew Leuchtmann are prosecuting this case.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.