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Healthcare Fraud

Texas Supreme Court Will Review Former Preston Hollow Dentist Dr. Richard Malouf’s $16.5 Million Fraud Case

A state district court held the former owner of All Smiles Dental Center liable for $16.5 in fraudulent charges in 2020.
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Dr. Richard Malouf has won a hearing in front of the Texas Supreme Court in his case against the state for allegedly defrauding Medicaid of millions of dollars. The review results from an appeal after a state district court found Malouf liable to pay $16.5 million in 2020.

Malouf was the former owner of All Smiles Dental Center, which had dozens of locations and provided dentistry and orthodontics to Medicaid patients in North Texas for years. His legal troubles began after then-Attorney General Greg Abbott sued Malouf in 2010 for Medicaid fraud. Court documents allege that over three years, Malouf submitted forms saying he provided services to Medicaid recipients even though other dentists in the practice performed the services.

The state’s case alleges that Malouf failed to denote the proper provider in around 1,800 Medicaid claims, putting himself as the dentist when other providers did the work. Two private citizens brought the case that the Supreme Court is hearing on behalf of the government. The state of Texas encourages those with knowledge of alleged fraud to be whistleblowers, allowing them to receive up to 30 percent of the funds recovered from the ruling.

He also allegedly billed for services while out of the country. The Dallas Observer reported that All Smiles billed Medicaid for around $10 million in orthodontics work in 2010, more than three times what the state of Georgia billed for Medicaid in orthodontic work that year.

Malouf appealed to the Supreme Court, arguing that he did indicate the correct license type and lacked any knowledge of improper billing. Preston Hollow People reported the news of the 2020 district court ruling, including Attorney General Ken Paxton’s comment on the case.

“I applaud my litigation team, the court, and the Health and Human Services Commission for stopping this misconduct and recovering taxpayer money,” said Paxton in a statement at the time. “Identifying and preventing Medicaid fraud continues to be a top priority for my office and I remain committed to ensuring that Medicaid dollars are preserved for those who most need them.” 

Malouf is no stranger to scrutiny. As accusations about the Medicaid fraud at All Smiles mounted, Malouf sued several people (including former D Magazine employee Candy Evans, other journalists, and his neighbor who is the mother of actors Luke and Owen Wilson) for reporting on his Strait Lane estate in Preston Hollow, which included a backyard water park, bowling alley, rock-climbing wall, and ballet room.

In a passionate lawsuit, Malouf accused Evans (who now runs the news site Candy’s Dirt) of approaching a former house manager to plant a hidden camera inside the house and that she entered his property uninvited during his daughter’s birthday party and started interviewing the child. He accused Laura Wilson (Luke and Owen’s mother) of allowing Evans onto her roof to view Malouf’s property. In 2012, CultureMap reported on the suit’s conclusion when Evans agreed to a temporary injunction prohibiting her from entering the property or getting a vantage point to view the property. In 2019, Malouf sold his home. Many of the cases against journalists were later dismissed.

If the Supreme Court had refused to review the case, the lower court decision holding him liable for $16.5 million in damages would have stood. The hearing offers Malouf another chance to make his case and avoid being held responsible.

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Will Maddox

Will Maddox

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Will is the senior editor for D CEO magazine and the editor of D CEO Healthcare. He's written about healthcare…

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