Cut & Run

He made millions sculpting the figures of Houston women while dodging one of the largest malpractice judgments in Texas history. But after botching another surgery, can Dr. Gerald Johnson continue to operate?

Kelly, like every other plastic surgeon in Houston, had heard of the $11.3 million judgment from the Newsome suit. But Johnson was able to convince Kelly that he had been unjustly persecuted.

"He blamed all this on, first, the nurse anesthetist, then the ambulance drivers, then the hospital," Kelly testified in one of several lawsuits spawned by the botched operation on Jill Newsome. "It was always somebody else's fault, but it wasn't his fault."

Kelly said he had no reason to doubt Johnson, so when a court-appointed receiver was assigned to monitor the surgeon's assets, he agreed to assume the appearance of having "hired" Johnson and his staff as employees. That done, Kelly opened a bank account in his name for Johnson, who clandestinely funneled what Kelly called "tremendous amounts of money" through it.

By the time Kelly realized he'd been, as he described it, "set up" by Johnson, he owed thousands of dollars in unpaid taxes on his partner's deposits. Kelly ended up bankrupt, and in 1989, he sued MediCash Co. Inc., an accounts-receivable service set up by Johnson in the name of his stepdaughter, Rae Lynn Martin. MediCash filed insurance claims and arranged patient payment plans for physicians. Since Martin was only 18 at the time, just out of high school and bound for the University of Texas in Austin, the company was staffed by employees who also managed Johnson's practice.

Kelly testified that MediCash was "an alter ego" of Johnson that paid the surgeon up-front for his operations. Kelly said that if a patient's insurance carrier covered less than the cost of a procedure, or if the patient defaulted on the installment plan, Johnson did not reimburse the company. Kelly claimed in his lawsuit (he was awarded a judgment but settled out of court when the company folded) that MediCash balanced its books with receivables the company collected and owed its other physician clients.

"I don't think [Johnson] refunded any of that to MediCash, and that's how we got to figuring, 'How in the world is he getting paid? Where did the overpayments come out of?' " he testified. "Me and the other doctors, that's where it came from."

By the time the Newsomes found out where Johnson's money was going, most of it was in an account under his wife's name. The rest had been channeled through a couple of Cayman Island shells that floated "loans" to Johnson's family members, who, in turn, helped Johnson liquidate his real property.

Johnson sued MediCash, too, not long after he filed for divorce from Rae Lynn's mother. His split from June Johnson, his wife of 18 years, occurred after Johnson had taken up with Lana Lea Ryan, a 45-year-old truck driver's daughter from the Rio Grande Valley who met the charismatic surgeon when she brought her teenage daughter in for a rhinoplasty.

The divorce of Gerald and June Johnson was an ugly, year-and-a-half-long affair. A settlement was reached last July, but June Johnson has received little of her share of the community property. She lost her high-powered attorney, Marian Rosen, because Johnson ignored a court order to pay his wife's legal bills. Johnson also refused to support his wife over the course of the proceedings, and was even cited for contempt of court at one point. June eventually filed for bankruptcy.

Though they've been together for four years now, there is no record of Johnson's having married the twice-divorced Lana in Harris County. She did, however, legally change her name to Lana Lea Johnson in July 1994, a week after Johnson's divorce from June was final. Lana is also listed as the owner of the $260,000 house in Bunker Hill Woods she now shares with Johnson.

Meanwhile, the surgeon is approaching his professional life from a new vantage point as well. After 20 years in northwest Houston, Johnson recently moved his practice to an office in the Texas Commerce Bank building in River Oaks. The change of locale puts him in the heart of a gold mine of opportunity, where he can satisfy the aging well-to-do's appetite for cosmetic rejuvenation in their own back yard. If all goes well, Johnson might someday choose to pay the eye-popping $106,000 annual malpractice premiums required of him. Until then, he is again performing surgery with no insurance.

At least when he operated on Charlotte, Johnson had insurance. She could receive up to $200,000 if she wins her malpractice claim, but perhaps more important, she'll have been spared the experience that has stolen the Newsomes' lives. But as Earl and Gail did 17 years ago, Charlotte and her attorneys think Gerald Johnson has done enough damage in his career. They'd like to see him lose his license.

"I feel like he used me for his own good, or so he thought, and it backfired in his face," says Charlotte, who, with her children, has moved to another state. "You don't use a human being as a guinea pig."

Johnson's credentials are respectable, if unspectacular: medical school at the University of Arkansas, class of 1966; an internship in Little Rock; two years in the Air Force, including a year as a flight surgeon in Vietnam; two years of general residency at Baylor Affiliated Hospitals; and a third year at the University of Texas-Hermann Hospital, followed by a two-year residency in plastic surgery.

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