Clinic owner arrested in multimillion-dollar fraud scheme involving non-existent psychotherapy services

Editor's Note:
This matter occurred on date indicated, but not published at that time due to government shutdown. Press release posted and made available following the return to normal operations.    

HOUSTON – A 47-year-old Houston resident has been taken into custody for his alleged role in a $4 million Medicare fraud and identity theft scheme, announced U.S. Attorney Nicholas J. Ganjei.

Dempsey Spears made his initial appearance before U.S. Magistrate Judge Richard Bennett.

A federal grand jury in Houston returned a nine-count indictment Sept. 23, which was unsealed upon his arrest. The indictment alleges that from 2016 to 2024, Spears submitted false and fraudulent claims to Medicare for psychotherapy services that were never provided.

According to court documents, Spears owned and operated two mental health clinics – Transitional Life Counseling and Consultation in Texas City and Spears Community Services in Mesquite. He allegedly continued billing under the names of seven licensed clinical social workers after they resigned from TLCC. The charges further allege he submitted claims for services purportedly provided to Medicare beneficiaries who were deceased at the time of the billed treatment.

From 2016 to 2023, Spears allegedly billed Medicare approximately $4 million in fraudulent psychotherapy claims tied to the seven former LCSWs and was paid approximately $1.5 million.

If convicted, Spears faces up to 10 years in federal prison for each count of health care fraud. He could also receive an additional two years for aggravated identity theft which must be served consecutively to any other prison term imposed. The charges also carry a possible $250,000 maximum fine.

The Texas Attorney General’s Medicaid Fraud Control Unit and Department of Health and Human Services - Office of Inspector General conducted the investigation. Assistant U.S. Attorney Kathryn Olson is prosecuting the case.

An indictment or criminal complaint is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.