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Ex-CEO of Health Clinic Found Guilty of Medicaid Fraud

by | Sep 28, 2022 | News, Open Content

In this week’s enforcement roundup, the former executive was convicted of healthcare fraud relating to mental health diagnosis and treatment.

In our latest weekly enforcement roundup of key cases involving the healthcare industry, the former CEO of Louisiana nonprofit St. Gabriel Health Clinic Inc., was convicted for his role in a healthcare fraud scheme involving mental health services.

Victor Clark Kirk, 73, was found guilty of five counts of healthcare fraud and one count of conspiracy to commit healthcare fraud on Sept. 26. He could face as much as 10 years in prison for each count.

The Scheme

According to a statement from the U.S. Department of Justice (DOJ), because St. Gabriel was a federally qualified health center (FQHC), it could provide both primary healthcare services to students in the school district it contracted with, “as well as services related to the diagnosis and treatment of mental illnesses—provided that such services were medically necessary—among other requirements.”

Under Kirk’s guidance, doctors from St. Gabriel taught various educational programs, including character development, to entire classes of students during their regular class periods. These classes were then fraudulently billed to Medicaid as “group psychotherapy,” according to the DOJ. To support the deception, Kirk had his company’s doctors diagnose the students with mental disorders they didn’t actually have. In total, Kirk caused more than $1.8 million in fraudulent billing for the supposed group psychotherapy from 2011 to 2015.

He is scheduled to be sentenced on January 12, 2023.1

Other Key Enforcement Actions Involving Healthcare

In other healthcare-related enforcement actions from last week:

Sept. 21: A former doctor from Missouri pleaded guilty to making false statements that certain tests and products were medically necessary for more than 2,000 Medicaid and Medicare patients from that state. However, the doctor, Oluwatobi Alabi Yerokun, “never met or examined” those patients, according to the DOJ. Instead, Yerokun received the patient information through a telemedicine arrangement with a staffing company, certifying genetic tests and durable medical equipment (DME) that wasn’t medically necessary. He caused more than $6.2 million to be billed to Medicare for the DME, of which Medicare paid $3.1 million, and caused more than $2.5 million to be billed to Medicare for the genetic testing, of which Medicare paid $525,000. He could face up to five years in prison for his role in the scheme.2

Sept. 21: The vice president of operations for North Carolina companies Carolina Rehab Products, Inc. (CRP) and Blue File DMC, LLC, pleaded guilty to falsifying physician orders for DME from the two companies. Those companies then billed Medicare roughly $50 million for the products, which often weren’t even shipped or didn’t have supporting physician orders. VP Kala Sloan forged those doctors’ orders in an effort to keep Medicare auditors from discovering the deception. However, it all came out anyway when Medicare Advantage insurer Cigna did an audit of CRP’s submitted claims. Sloan, who pleaded guilty to making/using false healthcare writings and documents and aiding and abetting, faces up to five years in prison if convicted.3

Sept. 22: A manufacturer of sleep and respiratory DME agreed to settle allegations of unlawful kickbacks for $1,283,825.40. According to the DOJ, Philips RS North America LLC, formerly known as Respironics, Inc., is alleged to have helped obtain a 12-month, interest-free loan for a DME supplier, an arrangement the US contended “violated the Anti-Kickback Statute and, in turn, the False Claims Act.” As well as the settlement, the company entered into a five-year Corporate Integrity Agreement with the Office of Inspector General for the U.S. Department of Health and Human Services.4


  1. https://www.justice.gov/opa/pr/former-ceo-health-clinic-convicted-medicaid-fraud
  2. https://www.justice.gov/usao-wdmo/pr/physician-pleads-guilty-making-false-statements-more-2000-medicare-medicaid-patients
  3. https://www.justice.gov/usao-ednc/pr/vice-president-raleigh-healthcare-company-pleads-guilty-making-and-using-fake-physician
  4. https://www.justice.gov/usao-ndia/pr/sleep-and-respiratory-equipment-manufacturer-pay-12-million-resolve-allegations