Convicted Riverside CEO Tells His Side of the Story

Earnest Gibson III, former CEO of Riverside General Hospital, is in the process of appealing his conviction.
Earnest Gibson III, former CEO of Riverside General Hospital, is in the process of appealing his conviction.
Photo by Susan Du

It's been two years since FBI agents burst into the Third Ward office of Riverside General Hospital's longtime CEO, Earnest Gibson III, and accused him conspiring to scam Medicare and Medicaid out of $158 million. Judge Lee Rosenthal ordered Gibson not to discuss Riverside business or speak to Riverside colleagues, so his side of the story went unheard. But since a jury convicted him on October 20, he's now filing a motion for a new trial and firmly maintaining his innocence as he awaits sentencing.

Federal prosecutors accused Gibson and others of paying illegal kickbacks to group homes owners to send their patients to Riverside so Riverside could then bill the government for medical services they it never intended to deliver. The hospital claimed to employ marketers who were really acting as patient bounty hunters, prosecutors said.

"The former president of Riverside Hospital, his son, and their co-conspirators systematically defrauded Medicare, treating mentally ill and disabled Americans like chits to be traded and cashed out to pad their own pockets," said Assistant Attorney General Leslie Caldwell in a statement. "For over six years, the Gibsons and their co-conspirator stuck taxpayers with millions in hospital bills, purportedly for intensive psychiatric treatment. But the 'treatment' was a sham - some patients just watched television all day."

Gibson, speaking out against his conviction, claims prosecutors and their witnesses took the jury for a ride. He says the government's witnesses were all confirmed criminals who stood to gain from falsely accusing him.

Gibson says he's rather "go down to Guantanamo Bay and be waterboarded to the point of death" than claim that Riverside ever paid for patients. "I want the jury to remember that, that one day I may be dead and gone, but it's gonna come up. Somebody will come out and tell the truth."

In 2012, as part of a nationwide healthcare fraud purge, federal investigators accused Riverside's assistant administrator Mohammed Khan of directing so-called marketers to headhunt patients who would be profitable for the hospital. Khan and the marketers he managed pleaded guilty to conspiring to scam Medicare, but then they pointed their fingers at the top boss, Gibson.

Gibson says Khan and his employees struck a deal with prosecutors to cut time from their sentences in return for testifying against him. Gibson, as well as his son, managed marketers too - people hired to promote Riverside's services - but none of those employees were accused of any wrongdoing.

His lawyer, Dick DeGuerin, says he had expected the prosecution to call Khan as a key witness so he could then establish that detail through cross-examination of the former administrator. The prosecution left him out of Gibson's trial, however. "I only suspect that they didn't call him because he would have confessed that it was all his doing, and that he made efforts not to let Gibson know what was going on," DeGuerin said.

The prosecution and defense agree that there was never any direct evidence linking Gibson to fraudulent Medical billings, but prosecutors said that either Gibson took part in the conspiracy or he turned a blind eye because he must have known what was going on in his own hospital. DeGuerin says Gibson, who had been investigated for healthcare fraud about a dozen times over the years, set in place policies meant to keep the hospital in compliance with the law.

Gibson demanded that marketers report how many hours they worked and where they went to advertise the hospital because he was trying to protect Riverside from potential kickback schemes, DeGuerin says. Gibson's signature was on every check and bill going in and out of Riverside, but DeGuerin says it was a low-rank accountant's job to stamp his stock signature on those checks.

"He never looked the other way. Instead, he tried to find out what was going on, but he was unsuccessful," DeGuerin said. "If people are going to lie to you they're going to lie to you. There's no evidence he ever knew of or paid a kickback."

Prosecutors painted a picture of Riverside's partial hospitalization programs, to which many of the billing irregulars were linked, as ramshackle homes where patients sat around in wait of medical services they would never receive. They said Gibson used Riverside to line his own pockets over the years while the hospital fell into debt and disrepair.

Yet residents of Houston's Third and Fifth Wards, where Riverside was known as an essential neighborhood health provider, say Gibson revitalized the historic hospital in his time as the CEO. He wrote grants worth millions of dollars and expanded programs throughout the state.

Dr. Edith Irby Jones, a retired Riverside physician who worked with Gibson for years, says Riverside has always catered to low-income and indigent patients. Before Gibson rose through the ranks to become CEO, the hospital was dormant, she says. He transformed the facilities and made Riverside someplace the city's most vulnerable patients felt comfortable going.

"I hate to see Riverside go through this situation because they really served a need," Jones said. "The type of patients that were patients at Riverside probably would not go to another hospital because they had some reservation of not being acceptable, real or imagined."

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