Houston Rehabilitation Center Owner Sentenced for $15 Million Health Care Fraud

Attorney General Ken Paxton announced that Gwendolyn Gibbs, 72, owner of the Daybreak Rehabilitation Center in the Houston area, has been sentenced to 84 months in federal prison. Gibbs orchestrated a $15 million health care fraud and kickback scheme. She has been 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 services, including for patients with intellectual disabilities, that were either never provided or not medically necessary. She also paid kickbacks to patient recruiters and owners of group homes to force 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, with assistance from 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 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, with the remaining 25 percent, totaling $6,981,395, funded by the State of Texas. Over the last three years, the unit has recovered more than 49 dollars for taxpayers for every dollar of state funding.