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Press Release

Former Pharmacy Owner Headed to Prison for Bogus Claims to Health Insurers

For Immediate Release
U.S. Attorney's Office, Southern District of Illinois


The pharmacist and former owner of Gibson’s Discount Drugs in Red Bud, Illinois, has been sentenced to 33 months in prison for engaging in a scheme to defraud federal health care benefit programs and private insurance companies. Steven P. Gibson, 30, pleaded guilty to federal charges back in August 2018.

Court records establish that Gibson purchased the pharmacy in October 2016 and began defrauding health insurers just two months later. From December 2016 to February 2018, Gibson submitted nearly 1,000 claims for "make believe" prescriptions under the names of his wife, his family members, and his pharmacy customers. To maximize his fraudulent gains, Gibson deliberately chose the most expensive drugs, such as Creon, a drug used to treat chronic pancreatitis, Pentasa, a drug used to treat ulcerative colitis, and hydroxychloroquine, a drug used to treat and prevent malaria. The fictitious prescriptions were not authorized by a licensed medical practitioner and were never actually filled. Gibson’s total take from Medicare, Medicaid, and private insurance companies exceeded $620,000 – money he has now been ordered to pay back in restitution.

Gibson’s crimes first came to light in late 2017, after a pharmacy customer recognized that her son had been billed for expensive medications he had not received and called to complain. The pharmacist who took that call then discovered Gibson’s fraud, quit her job, and notified authorities. A federal search warrant was executed at the pharmacy on February 8, 2018. Shortly thereafter, Gibson agreed to cooperate in the investigation and plead guilty.

As part of his plea deal with the United States, Gibson agreed to repay all of the money and to make restitution payments in advance of sentencing to the fullest extent possible. At sentencing, however, Gibson had repaid only $30,000 and had otherwise failed to account for the rest of the money he stole. In imposing sentence, United States District Judge Staci M. Yandle found Gibson’s failure to pay back more of the money incompatible with his expressions of remorse and refused to award him credit for acceptance of responsibility. "Talk is cheap," Judge Yandle told the defendant, quoting an opinion from the Seventh Circuit Court of Appeals. "The remorseful or repentant criminal would want to do everything possible to rectify the harmful consequences of his crime, and so if he still has any of the loot he will return it."

Judge Yandle was also troubled by statements made by Gibson’s wife in an online post to the pharmacy’s public Facebook account. The post, which was made on the same day Gibson pleaded guilty but was recently taken down, attempted to downplay his criminal conduct to the pharmacy’s customers:

Everything that was wrote about us receiving 630,000 or whatever the number that was put out there, is laughable to me and completely false. I SEE our bank accounts , I KNOW. * * * Everything that was wrote about him running claims and collecting money on multiple people that is a complete LIE. I know all the details of the investigation.

Although Gibson’s attorney maintained that his client had not known about his wife’s Facebook post and did not condone it, Judge Yandle found that position not credible and specifically cited the Facebook post as further indication that Gibson had not adequately accepted responsibility for his crimes. In handing down the nearly three-year sentence, Judge Yandle also emphasized the seriousness of so-called "white collar crimes" such as this one. "Some people minimize these kinds of crime," she said. "This court does not.

Steve Hanson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations, Kansas City Region, stated, "Individuals in trusted positions who submit false claims to our healthcare programs for personal enrichment will be pursued to the fullest and brought to justice."

Gibson was released on bond with special conditions pending the start of his prison term. His sentence also includes two years of supervised release. Because of the large amount of restitution he still owes, Gibson was not ordered to pay a fine.

The investigation was conducted by the U.S. Department of Health and Human Services, Office of Inspector General; the Illinois State Police, Medicaid Fraud Control Bureau; the Federal Bureau of Investigation; the Drug Enforcement Administration; United States Postal Inspection Service; and the National Insurance Crime Bureau. The case was prosecuted by Assistant United States Attorneys Michael J. Quinley and Nathan D. Stump.

If you suspect or know of an individual or company that is not complying with healthcare laws or public aid programs, you may report this activity to the local office of the U.S. Department of Health and Human Services, Office of Inspector General, or you may call 1.800.447.8477.

Updated January 23, 2019

Health Care Fraud