Attor­ney Gen­er­al Ken Pax­ton Secures 84-Month Prison Sen­tence for Clin­ic Own­er in $15 Mil­lion Medicare Fraud Scheme

Attorney General Ken Paxton announced that Gwendolyn Gibbs, 72, owner of the Houston-area Daybreak Rehabilitation Center, was sentenced to 84 months in federal prison for orchestrating a $15 million health care fraud and kickback scheme. Gibbs was also ordered to pay $8,680,380 in restitution to government health care programs and will be subject to three years of supervised release following her prison term.

“This successful investigation by my office highlights our unwavering commitment to protecting taxpayers and combating fraud,” said Attorney General Paxton. “We will continue to ensure that those who exploit our health care system and steal taxpayer funding are prosecuted to the full extent of the law.”

Gibbs falsified medical records and submitted false claims for patients, including individuals with intellectual disabilities, that were either never provided or not medically necessary. Gibbs also paid kickbacks to patient recruiters and owners of group homes in exchange for forcing residents to attend the clinic in exchange for transportation, supervision, and meals.

The investigation was conducted by Captain Stacey Overbay and Sergeant Joyce Combest of Attorney General Paxton’s Medicaid Fraud Control Unit, in cooperation with the FBI, the Department of Health and Human Services’ Office of the Inspector General, and the Railroad Retirement Board’s Office of the Inspector General. The United States Attorney’s Office for the Southern District of Texas prosecuted the case.

Since 2021, the Medicaid Fraud Control Unit has recovered more than $612 million in settlements, judgments, and restitution for Texas taxpayers. The Medicaid Fraud Control Unit receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $20,944,200 for fiscal year 2023. The remaining 25 percent, totaling $6,981,395, is funded by the State of Texas. For every dollar of state funding, the OAG’s Medicaid Fraud Control Unit has recovered more than 49 dollars for taxpayers over the last 3 years.