Dearing

I. Background

In December 2001 Arthur Dearing (“Art” or “Dearing”) and his brother Rodger opened a mental health clinic called Life Springs Mental Health L.L.C. in Nampa, Idaho. The facility was designed to provide services to patients at Valley Plaza, a residential care facility that Rodger owned. Rodger was a registered nurse but lacked prior mental health experi- ence. He ran the clinic’s day-to-day operations along with Greg Hassakis, a mental health consultant hired to set up the program. Art, whose background was in civil engineering, served as part-owner and visited the facility once or twice a month for business meetings.

Life Springs’ business model depended upon billing Med- icaid for the care provided to its patients for revenue. To that end, Art executed a Medicaid Provider agreement on behalf of Life Springs. This agreement included a contract between Life Springs and licensed physician Dr. Frances Wreggles- worth, who agreed to provide supervising physician services. Art signed the contract with Dr. Wregglesworth on behalf of the company. The application also included a note, affixed to the Wregglesworth contract, indicating that Medicaid employee Jack Weinberg…