No Jail Time for Couple Who Stole $1.8 Million

Judge sentences Plano residents to 5 years' probation in Medicaid scam

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    Joanna Kemp, 69, and Peter Kemp, 68, of Plano, repaid all of the stolen money to the government, including penalties and interest.

    A former prison psychologist and her husband who admitted to stealing inmates' identities to con taxpayers out of $1.8 million were sentenced Thursday to five years' probation.

    Joanna Kemp, 69, and Peter Kemp, 68, of Plano, pleaded guilty to scamming the Texas Medicaid program over 11 years in a complex scheme involving ghost employees and secret bank accounts.

    Federal prosecutors had asked for five-year prison sentences, but U.S. District Judge Ed Kinkeade sentenced the couple to probation, fined them $20,000 and ordered them to perform 100 hours of community service.

    The Kemps operated three residential care facilities called New Horizons for people with disabilities. Two were in Benbrook and one was in Granbury.

    As part of the scheme, Joanna Kemp admitted to stealing the identities and Social Security numbers from inmates at the Federal Correctional Institution in Seagoville, where she worked.

    The names were used to make it appear the residential care facilities employed more people than they really did. The number of employees was used in a formula by Medicare to set reimbursement rates.

    The couple admitted to forging more than 1,000 signatures to cash the ghost employees' paychecks and deposit them into three secret bank accounts. The Kemps ultimately used the money themselves. Even their own accountant was not aware of the scheme, according to court documents.

    In other cases, the couple billed Medicaid for services that were never provided.

    Attorneys for the couple noted they had no criminal history, admitted their guilt and repaid all of the stolen money to the government, including penalties and interest.

    "They clearly did something wrong (but) the government got rich on their mistakes," said Bob Webster, Joanna Kemp's attorney.

    She also lost her license to practice psychology, Webster said.

    David Finn, a former federal prosecutor and an attorney for Peter Kemp, said it's the only financial crime he's seen in which the thief completely repaid the stolen money.

    "It's an example crime doesn't pay," Finn said. "They did wrong. They 'fessed up."

    According to the criminal complaint, the scheme started in January 1999 and continued until April 2010.

    Kathy Colvin, a spokeswoman for the U.S. Attorney's office, provided information on the sentencing but did not immediately respond to a request for comment.