$6M pediatric Medicaid fraud scam ends in lengthy prison term

A dental operator at a pediatric clinic in Texas who pleaded guilty to orchestrating a $6 million Medicaid fraud and bribery scheme has been sentenced to 10 years in federal prison, according to the U.S. Department of Justice.

Gene Gaviola, 68, who operated Floss Family Dental Care in Houston, also must serve three years of supervised release immediately following his prison term and pay more than $4.9 million in restitution to Medicaid. Additionally, Gaviola must pay a personal judgment of more than $2.9 million, according to a press release dated June 25 from the U.S. Attorney’s Office, Southern District of Texas.

During the sentencing, Chief U.S. District Judge Randy Crane emphasized that Gaviola had failed to try to pay back restitution despite having $2 million in assets stashed away in the Philippines, according to the release.

In January 2024, Gaviola, 68, pleaded guilty to conspiracy to commit healthcare fraud, five counts of substantive healthcare fraud, three counts of payment of kickbacks, six counts of money laundering, and five counts of conspiracy to pay and receive kickbacks.

Gaviola admitted to submitting fake claims to Medicaid for reimbursement of pediatric dental services, including cavity fillings, that were provided between 2018 to April 2021.

In addition, he admitted to employing an unlicensed person, his son, to treat children, operating the practice with no dentists, and paying kickbacks to marketers and caregivers of Medicaid-insured children to bring them to Floss for dental services. Finally, Gaviola admitted to laundering more than $100,000 in Medicaid funds from the Floss bank account to his own bank account.

After deliberating for one hour following a three-day jury trial in February 2024, U.S. jurors convicted Ifeanyi Ozoh, 54, Floss’ manager, for his role in the scheme. Ozoh was found guilty of one count of conspiracy to pay and receive healthcare kickbacks and two counts of payment of kickbacks to marketers.

During the trial, jurors heard testimony that Ozoh paid marketers between $20 and $100 for each Medicaid-insured child referred to Floss. Marketers testified that Ozoh slipped them cash secretly, sometimes leaving their illegal kickbacks on top of a vending machine located down the hall from the clinic. In total, Ozoh reportedly paid out about $163,000 in bribes. Ozoh was reportedly cautioned that it was illegal to pay marketers. Medicaid prohibits the payment of kickbacks for referrals of medical services.

In April 2024, another co-conspirator and ex-manager at Floss, Mia Diaz, 48, of Cleveland, was sentenced to 21 months in jail followed by three years of supervised release, according to the release.

Another former Floss manager, Christian Agno Aquino, 42, is awaiting trial. He was charged with conspiracy to pay and receive kickbacks, healthcare fraud, and conspiracy to commit healthcare fraud for his role in the scam. Aquino’s charges were filed almost a year after Ozoh and Gaviola were charged.

From 2020 to 2021, Floss billed Medicaid about $6.9 million. Floss received about $4.9 million on those claims, most of which were predicated on kickbacks paid to marketers and for dental services that were not provided.