Nursing Home Administrator Receives 20-Year Prison Sentence for Health Care Fraud

A former nursing home operator received a twenty-year prison sentence from a federal district judge in Atlanta, Georgia on August 14, 2012. George Houser, age 64, was convicted in April of defrauding state Medicare and Medicaid programs. As a result of the fraudulent scheme, nursing home residents went without adequate care for years.

According to the U.S. Attorney’s Office, Houser and his wife ran two nursing homes in Rome, Georgia from July 2004 to July 2007, and another home in Brunswick from September 2004 to September 2007. The two Rome nursing homes each housed about one hundred residents, and the Brunswick facility had 204 beds. Houser submitted bills to Medicare and Medicaid for about $39.4 million during the period from July 2004 to September 2007. He certified to the government that he was providing health care, a clean living environment, and a good quality of life for the residents of the three homes. He received $32.9 million in payments from Medicare and Medicaid.

Of the total amount received from the federal government, prosecutors alleged that Houser appropriated over $8 million for personal use. This included $2.7 million to purchase real estate as part of a planned hotel in Rome, as well as plans for hotels in Brunswick and Atlanta. He also allegedly bought a $1.4 million house for his ex-wife, and put her on the payroll of one of the nursing homes in lieu of alimony.

During this time, conditions for the residents in the three nursing homes were described repeatedly as “inadequate.” Numerous staff members reportedly resigned after paychecks started bouncing. As employees left, few applicants sought the open positions. This left the facilities significantly understaffed. The facilities also fell into disrepair, with few resources applied towards upkeep of the buildings. Roof leaks and broken air conditioning units became common. As a result of non-payment to the nursing homes’ vendors, the facilities experienced shortages of food, medicine, and even cleaning supplies. Some employees used their own funds to buy food for residents.

State regulators received a high volume of complaints from residents and their families, staff members, and vendors. Medicare shut all three facilities down in July and September 2007. A state investigator that visited one facility in May 2007 described finding “heat, flies, filth, and stench.” Federal prosecutors charged Houser and his wife with conspiring to defraud Medicare and Medicaid, as well as other charges, in April 2010.

Rhonda Houser pleaded guilty to health care fraud in December 2011. George Houser demanded a bench trial, which occurred between January 30 and February 28, 2012. The judge entered an order in April finding Houser guilty of health care fraud conspiracy, failure to pay over $800,000 in payroll taxes for nursing home employees, and failing to file personal income tax returns. The judge pronounced Houser’s sentence on August 14, imposing a twenty-year prison sentence plus three years of supervised release, restitution to Medicare and Medicaid of $6.7 million, and restitution to the Internal Revenue Service of over $800,000.

The lawyers at Lebowitz and Mzhen help obtain compensation for people in Maryland injured due to abuse or neglect by nursing home staff. To schedule a free and confidential consultation, contact us today online, or by calling (800) 654-1949.

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Medicare Formally Announces Partnership to Combat Use of Antipsychotic Medications as “Chemical Restraints” in Nursing Home Residents Suffering from Dementia, Maryland Nursing Home Lawyer Blog, June 14, 2012

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