Local Businessman Convicted In $19+ Million Health Care Fraud Scheme

HOUSTON - Joseph Edem, 53, of Richmond, has been convicted of conspiracy to commit health care fraud relating to medically unnecessary diagnostic testing and physical therapy, United States Attorney Kenneth Magidson announced today.

Edem was originally indicted with former doctor Donald Gibson II, 56, of Sugarland. That indictment alleged 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, according to the indictment.

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.

Edem operated medical clinics under the names of other individuals to conceal his financial interest in the businesses. Edem admitted today that he conspired to cause the submission of false claims to the Medicare and Medicaid programs and share in the proceeds. Edem admitted he paid patient recruiters for referring Medicare/Medicaid beneficiaries and also paid Medicare beneficiaries for showing up at the medical clinics.

U.S. District Court Judge Lynne N. Hughes, who accepted the guilty plea today, has set sentencing for May 28, 2013, at which time Edem faces up to 10 years in federal prison, as well as a possible $250,000 fine. 

The case against Gibson is pending. He is presumed innocent unless and until convicted through due process of law.

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.