Former Melissa, Texas mayor David Dorman has been sentenced to prison for taking part in a bribery scheme with a real estate broker. The Texas real estate license of the Realtor he “worked” with will also be suspended.

Melissa_Sign_3This is another Byron Harris story: last January, Byron told us that Dorman agreed to plead guilty if the charge against him was changed from extortion to mail fraud, which carries the same penalty. Byron also said he has to return the funds he received as a bribe. But…

“Whatever the charge, Dorman is guilty of a serious crime, said Malcolm Bales, U.S. Attorney for the eastern district of Texas, whose office prosecuted the case.

“He flat-out abused the position that the people of Melissa elected him to, to line his pockets,” Bales said.

In a signed factual statement Dorman made to the federal court, the former mayor admitted he took two payments from real estate developer John Christie in 2007 in exchange for annexing land into the City of Melissa and agreeing that Melissa would provide water and sewer lines to the property.”

Wow. Just like that. Well Dorman was just sentenced to 33 months in federal prison and three years of supervised release. This January, both men pleaded guilty to charges related to the bribery scheme.

Christie will serve six months in prison, and get one year of supervised release. His real estate license will be suspended during that time. According to news reports, Dorman solicited a $70,000 bribe from Christie, but prosecutors say he actually got $30,000 in three separate payments. The deal was this: Dorman arranged to annex land from a neighboring city so Christie could develop it, land water and all, and sell it for profit.

Sweet, right? Also illegal!

Candy and her crack legal team from Friedman and Feiger: Jason Friedman and James Bell

 Our embattled Candy has been on blog-lite these past few days, thanks to the Maloufs’ attempts to chill her free speech down at Dallas County Court at Law No. 3 in Malouf vs. Mary Candace Evans, Byron Harris and WFAA-TV and Laura Wilson.

Now that Candy and WFAA agreed to a temporary injunction wherein they cannot step foot on the Maloufs’ property, the parties are not scheduled back in court until September, when the trial is set to begin.

Several Dallas media outlets have been covering the temporary injunction hearings over the last few days. Claire St. Amant, managing editor of Culturemap Dallas, was down there for at least two days and we think she did the best overall reporting of facts. Anna Merlan of the Dallas Observer gets the prize for her description of Mrs. (“Lady”) Malouf and her husband: “Dr. Malouf is a tall, beaky man, who looked both weary and pissed off …” However, we think she missed the entire point of star attorney James Bell’s cross-examination, most likely because she wasn’t in the courtroom over the past few days.

In any case, both reporters missed the best line of the day: Dr. Malouf, a millionaire who owns a 30,000 square foot home on Strait Lane and a couple of private jets, claims he has suffered from the collective reporting on his backyard waterpark, saying he cannot get a job or rent office space because of it.

The Medicaid nukes are coming to town from Washington, D.C. to infuse more power into Greg Abbot’s investigation of dental Medicaid fraud, the kind that Byron Harris has brought to the radar. He and other whistleblowers say abusing Medicaid reimbursements helped pediatric dentists like Richard Malouf roll in billions and build enormous homes, buy second and third homes, build backyard waterparks and live amazingly lavish lifestyles on the tab of U.S. taxpayers. Malouf may be crazy enough to build a water park in his back yard on Strait, but there are other guys just like him in humungo homes paid for with dental Medicaid funds that may be perfectly legit… or may not be.

Tune into WFAA Channel 8 Tuesday night for another juicy Byron Harris report.

Getting tough is a good thing, yes. But could this sudden new “get tough” mode limit more patient access to healthcare? Yes, says the Texas Medical Association.

The Texas Tribune reported last week that the office of Inspector General at the  Department of Health and Human Services is teaming up, bringing in more resources and stepping up the investigations. Sources tell me the FBI may be coming to town, and not just to visit John Wiley Price. I was told to carefully read the Texas Tribune story, like this graph:

” State authorities familiar with the task force’s investigations said the group is committed to recovering all taxpayer funds lost to dental fraud, from both dental providers and the Texas Medicaid and Healthcare Partnership, which was responsible for evaluating the medical necessity of dental claims and approving payment.”

So many times these investigations turn up with empty pockets — the crooks have spent the money and are “broke”. This time, however, I hear the Feds are onto a hot lead with deep pockets. Like a local company you may have heard of called Affiliated Computer Systems on Central Expressway that is now owned by Xerox.

The other question I have is this: who are the folks IN AUSTIN who let this rampant, in my view obscene rip off of Medicaid resources take place? There is one thing I will say about Richard Malouf and the others: he may have taken advantage of a situation that was wide open to him, the perfect pass. But the Texas Department of Health and Human Resources under Rick Perry, was totally asleep at the wheel on this one. They can say–

Most of the rise in Medicaid dental claims was probably legitimate, said Stephanie Goodman, spokeswoman for HHSC, because the state had increased reimbursement rates by 50 percent to expand access to care. “Those other factors kind of masked the fact that there was also probably an increase of bad actors in the program,” she said.

From an earlier Texas Tribune Report, it appears that those in charge of the Medicaid hen house in Austin were rubber-stamping, or approving, just about everything and somehow not noticing the swelling reimbursements:

“…it was common knowledge among Texas dental providers that the company contracted by the state to administer Medicaid dental claims, Texas Medicaid and Health Partnership, and its subcontractor, ACS Xerox, rubber-stamped most claims to put braces on children. The federal and state governments are currently auditing that since-replaced orthodontic authorization process, but state officials have already fired the dental director of TMHP and admitted they’ve found problems in the prior authorization process. Lawyers say it’s possible the state could pursue fraud charges against those contractors for approving medically unnecessary claims, but it seems unlikely, particularly because it would mean acknowledging mismanagement of the program.

Texas became the poster child for dental fraud after 2007, when after a lawsuit, the Legislature allotted an additional $1.8 million for Medicaid children’s dental services to increase access to care. Still, this was their job: watching the henhouse. Perhaps the state bureaucrats, who are by now long gone, should be prosecuted? Will be prosecuted?

Stories like this peel back the way government often works, and leaves me more skeptical than ever of government-controlled health care. Medicaid reimburses dentists and physicians very little for honest health care services because funding is sparse. And Medicaid patients tend to be needier, the sickest of the pool, so they utilize more services. Therefore many physicians won’t take on Medicaid patients. They tend to be bigger liability risks. Even if they do agree to treat them, with reimbursements pennies on the dollar, docs cannot find specialist referrals. Once the state of Texas increased reimbursement rates by 50% for pediatric orthodontics, the corporate dental clinics or DSO’s couldn’t get here fast enough.

Then I ask, where the hell was the Texas Dental Association when all this happened and what are they doing to punish these dentists? One whistleblower out of Fort Worth told the Texas Tribune that –

” she had to remove six teeth in a child’s mouth that had abscessed less than six months after Medicaid paid for the child to be treated at a nearby dental clinic. “When I see this type of situation, I’m pulling patient records, I’m keeping patient records, I’m calling the [Office of the Inspector General],” said Staffel.”

If true, this is child abuse, no different than Elizabeth Escalona super-gluing her daughter’s hands to the wall. I’m told there are hundreds of children in San Antonio with metal mouths, children who will need serious repair work because of these clowns, some who may be left WITHOUT TEETH! And if you have ever seen how an infant is put into a “papoose” — strapped down in a mini strait jacket, noses pinched, well! My son had this done when he was small for stitches after he ripped his arm open on our fence. I could not bear to watch. A necessary evil for truly injured children, but for orthodontics?

And it will affect all of us. Already the Texas Health and Human Services Commission has adopted new rules that make every single billing error a physician or their staff make turn the provider into a suspect for fraud and abuse. Medicaid billing is extremely complex, and physicians who check the wrong box could now be investigated as fraud suspects. HHSC is are doing exactly what the banks did after the housing bubble burst: corporal punishment, swinging the pendulum back,  getting unreasonably tough on everyone now because they have major egg on their face. The result is exactly what Mitt Romney said during the last presidential debate: physicians will not participate in Medicaid, severely limiting health care access to millions. Here’s what the Texas Medical Association says:

Without due process protections and other important changes in the rules as proposed, “the pervasive fear among physicians that they will be incorrectly accused of fraud, waste, or abuse, or denied meaningful recourse in a fraud investigation will continue to contribute to the decline in physician participation in Medicaid.”

But oh well, Richard Malouf has a waterpark in his backyard for his family. Who cares about the rest of us?


You just might want to tune into WFAA-TV Channel 8 tonight to see how we got “hosed” by the gardeners over at Dr. Richard Malouf’s house, and more, way more. Like, I have to keep my lips sealed until 10 but you are going to LOVE this report. And I have a teeny tiny sound bite in tonight’s story. I’m actually headed over to a party on the other end of Strait Lane right now… Brint Ryan’s house…but I’m prepared: have a shower cap packed in my pocket.


Byron Harris at WFAA-TV is the guy who busted Richard Malouf. He’s got some more info coming down the pike, and we are both watching progress on what I have christened “Water Pic Park”, the massive backyard private water park project Malouf is building over at 10711 Strait Lane. So Friday we met in front of the house to check progress and talk about how the neighbors feel. (Hint: they are not happy.) You may recall, Malouf called the cops on me and accused me of trespassing on his property on August 22. I did not; was not even near Strait Lane and can prove it. Well, he wasted no time in calling the cops Friday on Byron Harris and his camera crew — this before I got there. Malouf drove out in his Bentley. Cops came, said WFAA doing nothing wrong. Cops left. I arrive for the interview. You can’t see much now from the front, the big 3-story tall tubes are now in the back. Oh but you can see plenty from the neighbor’s yard, hint hint. We are busy talking when we notice water being sprayed OVER the fence. From a hose — don’t worry, the cameras caught the whole thing. They told us (from behind the fence) they were watering the trees, but most of it was directed our way. It was so hot Friday, that little shower felt good!

Can’t wait for the story to run. See, Malouf really is trying to create Wet N Wild over there on Strait Lane — even in the streets.

Meantime, wanted you to see the new “No Trespassing”  signs he has put out. They mean business, too, as I’m told orders have been given to shut the gates immediately after they are opened. Operation protect Water Pic Park!