Former nursing home operator sentenced to 20 years in prison for healthcare fraud

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A former Georgia nursing home operator will spend 20 years in prison on charges of healthcare fraud and tax evasion. This case is the first in which a defendant has been convicted in federal court for submitting claims for payment for “worthless services,” federal officials said Monday.

George D. Houser, 64, operated two nursing homes in Georgia. He was convicted after a bench trial for conspiracy to defraud Medicare and Georgia's Medicaid program, and for failure to file personal income taxes in 2004 and 2005. Houser also failed to pay over $800,000 in his nursing home employees' payroll taxes to the Internal Revenue Service, which has recently been pursuing a claim against a former nursing home executive in Rhode Island around similar misdeeds.

According to the lawsuit, Medicare and Medicaid paid Houser and his facilities more than $32.9 million between July 2004 and September 2007. But according to evidence presented in the trial, Houser diverted more than $8 million of that toward his own personal use. Meanwhile, the state of Georgia received numerous complaints about poor conditions in his facilities.

The court concluded that Houser was well aware that his facilities were experiencing leaky roofs, food and medication shortages, inadequate staffing and unsanitary conditions. Due to Houser's failure to pay vendors, staff members frequently used their own funds to purchase food for residents. Staff members also took residents' laundry home with them due to broken machines in the facilities.

Houser and his wife used the diverted funds on real estate ventures, homes, travel, vehicles and other personal expenses, prosecutors said. United States District Judge Harold L. Murphy handed down Houser's sentence.

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