HOUSTON (KTRK) -- Law enforcement sources tell Eyewitness News the FBI has arrested seven people connected to a local hospital. A federal strike force has charged 91 people in seven different cities. All of them are in the medical industry and they're all accused of Medicare fraud schemes.
We watched 12 six people involved in that health care fraud crackdown appear in federal court Thursday afternoon. Seven of them have ties to one of the city's oldest hospitals, in Houston's Third Ward, and the most prominent is the facility's own president.
Riverside General Hospital has had its fair share of problems lately, even some "difficult times" as its president, Earnest Gibson III, puts it on the hospital's website. But perhaps there's no time more scandalous a time than now.
Riverside General's at the center of a nationwide health care fraud investigation.
"Charges have been brought against 91 defendants, including doctors, nurses and other licensed medical professionals for their alleged participation in fraud schemes involving nearly $430 million in false billings," U.S. Attorney General Eric Holder said.
In Houston, investigators allege Gibson, his son, Earnest IV, William Bullock and five others linked to the hospital and its satellite offices were part of an elaborate Medicare scheme involving programs connected to the treatment of mental illness.
They're accused of money laundering, submitting false claims to the government for services that weren't needed and bribing Medicare beneficiaries with cigarettes and food.
"It's a shame, it's injustice to this community. That's what it is," Gibson told us.
"Are you guilty of Medicare fraud?" we asked.
"Absolutely 1,000 percent no," he replied.
"Why would they charge you then?"
"Because this is crazy accusation."
Court documents allege Riverside General's director and co-conspirators submitted approximately $158 million in fraudulent claims between 2005 and 2012.
"Such activity not only siphon precious taxpayer resources, drive up health care costs and jeopardize the strength of the Medicare program, it also disproportionately victimizes the most vulnerable members of our society, including the elderly, disabled and impoverished Americans," Holder said.
The judge has set the Gibson's bond at $75,000. Also as part of their bond condition, the judge requested that all the defendants get jobs not related in the health care field. But Gibson's attorney Catherine Baen says her client has helmed Riverside General Hospital for three decades and they will fight that stipulation.
"There was an investigation done on this long ago, an internal investigation I believe, and it showed no wrong doing and Mr. Gibson is not guilty," Baen said.
Many of the defendants will return to court next week for a hearing, though for long time community activists like Pastor James Nash, they are hoping the historic hospital survives.
"That hospital is an icon, and in that community it's very much needed," Nash said.
A spokesperson for Riverside told us, "The hospital is waiting on legal counsel at this time. We do support Mr. Gibson and his leadership for 30-plus years."
All the defendants are scheduled for another hearing in a week.
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