Insurance Fraud NEWS
Ringleader convicted of $1B nursing-home con in Florida
April 05, 2019, Miami, FL
A federal jury on Friday convicted a Florida health care executive on 20 criminal counts in what prosecutors described as a $1 billion Medicare fraud scheme.
Jurors reached a partial verdict after four days of deliberating the fate of Philip Esformes in one of the biggest such cases in U.S. history. Jurors were undecided on six additional counts, but prosecutors accepted the verdict rather than send them back for further deliberations.
The wealthy Miami Beach businessman operated a network of nursing homes and assisted living facilities in South Florida.
Jurors found him guilty of paying kickbacks and bribes to doctors and administrators so they would refer patients to his businesses. A former Ivy League basketball coach testified Esformes, 50, bribed him to get his son into school. He was also convicted of charges of obstruction of justice, for plotting to help one of his co-conspirators flee to another country.
The jury could not decide whether Esformes was guilty of Medicare fraud conspiracy. They found him guilty of money laundering and of bribing a Florida health regulator to warn him when inspectors planned surprise visits to his facilities and when patients made complaints.
"Philip Esformes orchestrated one of the largest health care fraud schemes in U.S. history, defrauding Medicare and Medicaid to the tune of over a billion dollars," Assistant Attorney General Brian A. Benczkowski said in a statement. "I commend our dedicated prosecutors and law enforcement partners for their professionalism and unyielding pursuit of justice on behalf of American taxpayers and vulnerable beneficiaries."
Esformes' defense team plans to appeal the decision.
Attorney Roy Black said the government attorneys could not prove the main count in their case against Esformes — the conspiracy to commit health care fraud charge. He also suggested prosecutors inflated the amount of money involved.
"They have hyped this into astronomical terms since the beginning. It came back to bite them," Black said.
Esformes has been jailed since his 2016 arrest. The charges he was convicted of add up to more than 250 years in prison, but he is likely to get far less than that under federal sentencing guidelines.
The jury will return on Monday to decide on issues related to the confiscation of the health care executive's assets.
The wealthy Miami Beach businessman operated a network of nursing homes and assisted living facilities in the Miami area.
His health care network and other co-conspirators billed Medicare and Medicaid $1 billion for fraudulent services between 2009 and 2016, prosecutors said.
A hospital administrator and a physician's assistant and other co-conspirators pleaded guilty previously for their roles in the scheme. Some of them testified against Esformes during the seven-week trial.
The witnesses described how Esformes would direct them to pay doctors in cash, using code words like "fettuccine." They said the purpose for the kickbacks was to fill his facilities at full capacity.
The scheme soon became more sophisticated and soon they were inflating invoices that accounted for kickbacks and bribes, according to testimony.
A health regulator said she was paid to provide a schedule of unannounced inspections to Esformes' collaborators, saying she knew it was for their boss.
Esformes' defense tried to discredit the witnesses, saying they were lying in order to get reduced sentences. Attorneys said the businessman never paid bribes to doctors nor to the regulator.
They said the inflation of invoices may have seemed "sneaky," but it was how Esformes' collaborators would "square up with him" at the end of the month. But it was Esformes' own money, not Medicare funds, his lawyers said.
The co-conspirators said the bribes went both ways, testifying Esformes accepted kickbacks to offer other health care providers access to patients in his facilities and bill Medicare for services that were unnecessary or fake. Some of the kickbacks were checks made to mistresses and basketball coaches that got Esformes' son into the Wharton School of the University of Pennsylvania by recruiting him as a player.
Former University of Pennsylvania basketball coach Jerome Allen, now an assistant with the Boston Celtics, testified he would not have recruited Esformes' son if it wasn't for the bribes. Another coach implicated was recently suspended from Auburn University.
There was also a series of text messages discussing SAT scores between Esformes and Rick Singer, the admissions consultant at the center of a college bribery scandal who pleaded guilty in a Boston federal court.