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Date: 04-05-2019

Case Style:

United States of America v. Philip Esformes

Case Number: 1:16-cr-20549-RNS

Judge: Robert N. Scola, Jr.

Court: United States District Court for the Southern District of Florida (Miami-Dade County)

Plaintiff's Attorney: Allan Medina, Drew Bradylyons, James Hayes, Elizabeth Young, Jeremy Sanders, John Shipley, Dan Bernstein, Alison Lehr, Nalina Sombuntham and Daren Grove

Defendant's Attorney: Bradley Horenstein, Robert J. Kuntz, Howard Milton Srebnick, Jacqueline Perczek, Jennifer Christianson, Marissel Descalzo, Rossana Arteaga-Gomez, Roy Eric Black

Description:




Miami, FL - South Florida Health Care Facility Owner Convicted for Role in Largest Health Care Fraud Scheme Ever Charged by The Department of Justice, Involving $1.3 Billion in Fraudulent Claims

A federal jury found a South Florida health care facility owner guilty for his role in the largest health care fraud scheme ever charged by the Justice Department, involving over $1.3 billion in fraudulent claims to Medicare and Medicaid for services that were not provided, were not medically necessary or were procured through the payment of kickbacks.

After an eight-week trial, Philip Esformes, 50, of Miami Beach, Florida, was convicted of one count of conspiracy to defraud the United States, two counts of receipt of kickbacks in connection with a federal health care program, four counts of payment of kickbacks in connection with a federal health care program, one count of conspiracy to commit money laundering, nine counts of money laundering, two counts of conspiracy to commit federal program bribery, and one count of obstruction of justice before U.S. District Judge Robert N. Scola Jr. of the Southern District of Florida. Sentencing has not yet been scheduled.

“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,” said Assistant Attorney General Benczkowski. “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 who, as a result of Esformes’s crimes, were denied the level of care that they needed and deserved.”

“Philip Esformes’ criminal scheme defrauded America’s health care system out of millions of dollars, that would have otherwise provided quality care to patients in need,” said U.S. Attorney Fajardo Orshan. “I commend the Assistant U.S. Attorneys from the Southern District of Florida, who worked tirelessly alongside their partners at the Department’s Criminal Division, the FBI and HHS-OIG to bring this case to justice. This massive fraud scheme, perpetuated in nursing and assisted living facilities in our South Florida communities, compromised the integrity of our local health care system. We remain united in our commitment to root out health care fraud and support quality patient care.”

“Philip Esformes is a man driven by almost unbounded greed,” said Assistant Special Agent in Charge Denise M. Stemen of FBI Miami. “The illicit road Esformes took to satisfy his greediness led to over $800 million in fraudulent health care claims, the largest amount ever charged by the Department of Justice. Along that road, Esformes cycled patients through his facilities in poor condition where they received inadequate or unnecessary treatment, then improperly billed Medicare and Medicaid. Taking his despicable conduct further, he bribed doctors and regulators to advance his criminal conduct and even bribed a college official in exchange for gaining admission for his son to that university. The FBI and its partners are constantly investigating health care fraudsters, big and small, who steal money from taxpayers at the expense of patients in need of quality medical care.”

“This largest ever healthcare fraud conviction highlights the awful toll criminal schemes take on federal health programs,” said HHS-OIG Special Agent in Charge Richmond. “Even beyond the vital dollars lost though, Esformes exploited and victimized patients by providing inadequate medical care and poor conditions in his nursing homes. Along with our law enforcement partners, we will continue the fight against such parasites.”

According to evidence presented at trial, from approximately January 1998 through July 2016, Esformes led an extensive health care fraud conspiracy involving a network of assisted living facilities and skilled nursing facilities that he owned. Esformes bribed physicians to admit patients into his facilities, and then cycled the patients through his facilities, where they often failed to receive appropriate medical services, or received medically unnecessary services, which were then billed to Medicare and Medicaid, the evidence showed. Several witnesses testified to the poor conditions in the facilities and the inadequate care patients received, which Esformes was able to conceal from authorities by bribing an employee of a Florida state regulator for advance notice of surprise inspections scheduled to take place at his facilities. The evidence further showed that Esformes used his criminal proceeds to make a series of extravagant purchases, including luxury automobiles and a $360,000 watch. Esformes also used criminal proceeds to bribe the basketball coach at the University of Pennsylvania in exchange for his assistance in gaining admission for his son into the university. Altogether, the evidence established that Esformes personally benefited from the fraud and received in excess of $37 million.

Esformes’s coconspirator, physician’s assistant Arnaldo Carmouze, previously pleaded guilty to conspiracy to commit health care fraud and is scheduled to be sentenced on April 10. Esformes’s coconspirator Odette Barcha also pleaded guilty to one count of conspiring to violate the anti-kickback statute. Barcha was sentenced on April 3 to serve 15 months in prison followed by three years of supervised release. She was also ordered to pay $704,516.00 in restitution.

This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida with assistance from Florida Attorney General’s Office Medicaid Fraud Control Unit.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.


Charges:


18:1349 Conspiracy to Commit Health Care Fraud and Wire Fraud
(1)
ATTEMPT AND CONSPIRACY TO COMMIT MAIL FRAUD
(1s)
ATTEMPT AND CONSPIRACY TO COMMIT MAIL FRAUD
(1ss)
CONSPIRACY TO COMMIT HEALTH CARE FRAUD AND WIRE FRAUD
(1ssss)
18:1347 Health Care Fraud
(2-3)
HEALTH CARE FRAUD
(2s-3s)
HEALTH CARE FRAUD
(2ssss-3ssss)
18:371 Conspiracy to Defraud the United States and Pay and Receive Health Care Kickbacks
(6)
CONSPIRACY TO DEFRAUD THE UNITED STATES
(6s)
CONSPIRACY TO DEFRAUD THE UNITED STATES
(6ss)
CONSPIRACY TO DEFRAUD THE UNITED STATES AND PAY AND RECEIVE HEALTH CARE KICKBACKS
(6ssss)
ACTS INVOLVING FEDERAL HEALTH CARE PROGRAMS - ILLEGAL RENUMERATIONS
(7ss-15ss)
18:371 Receipt of Kickbacks in Connection with a Federal Health Care Program
(8-9)
PAYMENT TO NON-LICENSED PHYSICIAN
(8s-9s)
ACTS INVOLVING FEDERAL HEALTH CARE PROGRAMS - ILLEGAL RENUMERATIONS
(8ssss-9ssss)
42:1320a-7b(b)(2)(A) Payment of Kickbacks in Connection with a Federal Health Care Program
(10-15)
ACTS INVOLVING FEDERAL HEALTH CARE PROGRAMS - ILLEGAL RENUMERATIONS
(10s-15s)
ACTS INVOLVING FEDERAL HEALTH CARE PROGRAMS - ILLEGAL RENUMERATIONS
(10ssss-13ssss)
ACTS INVOLVING FEDERAL HEALTH CARE PROGRAMS - ILLEGAL RENUMERATIONS
(14ssss)
ACTS INVOLVING FEDERAL HEALTH CARE PROGRAMS - ILLEGAL RENUMERATIONS
(15ssss)
18:1956(h) Conspiracy to Commit Money Laundering
(16)
MONEY LAUNDERING - INTERSTATE COMMERCE
(16s-30s)
MONEY LAUNDERING - INTERSTATE COMMERCE
(16ss-30ss)
CONSPIRACY TO COMMIT MONEY LAUNDERING
(16ssss)
18:1956(a)(l)(B)(i) Money Laundering
(17-25)
MONEY LAUNDERING
(17ssss)
MONEY LAUNDERING
(18ssss-21ssss)
MONEY LAUNDERING
(22ssss)
MONEY LAUNDERING
(23ssss)
MONEY LAUNDERING
(24ssss)
MONEY LAUNDERING
(25ssss)
18:1503 Obstruction of Justice
(26-27)
MONEY LAUNDERING
(26ssss-28ssss)
MONEY LAUNDERING
(29ssss)
MONEY LAUNDERING
(30ssss)
CONSPIRACY TO DEFRAUD THE UNITED STATES
(31s)
CONSPIRACY TO DEFRAUD THE UNITED STATES
(31ss)
CONSPIRACY TO COMMIT FEDERAL PROGRAM BRIBERY
(31ssss)
INJURING OFFICER/JUROR/WITNESS
(32s-33s)
INJURING OFFICER/JUROR/WITNESS
(32sss-33sss)
CONSPIRACY TO COMMIT FEDERAL PROGRAM BRIBERY AND HONEST SERVICES WIRE FRAUD
(32ssss)
BRIBERY INVOLVING FEDERAL PROGRAMS
(33ssss)
OBSTRUCTION OF JUSTICE
(34ssss)
CONSPIRACY TO MAKE A FALSE STATEMENT RELATING TO HEALTH CARE MATTERS
(35ssss)

Outcome: 04/05/2019 1244 Jury Note as to Philip Esformes (jh) (Entered: 04/05/2019)
04/05/2019 1245 JURY VERDICT as to Philip Esformes (1) Guilty on Count 6ssss,8ssss-9ssss,10ssss-13ssss,16ssss,18ssss-21ssss,25ssss,26ssss-28ssss,30ssss, 31ssss,32ssss,34ssss (mr1) (Entered: 04/05/2019)
04/05/2019 1246 Proposed Jury Instructions by Philip Esformes (Attachments: # 1 Exhibit, # 2 Exhibit)(Srebnick, Howard) (Entered: 04/05/2019)
04/05/2019 1247 Minute Entry for proceedings held before Judge Robert N. Scola, Jr: Jury Deliberations as to Philip Esformes held on 4/5/2019. Day 37. Jury verdict rendered, see verdict 1245 . Jury panel to return 4/8/2019 at 10:00 AM for trial re forfeiture. Court Reporter: Tammy Nestor, 305-523-5148 / Tammy_Nestor@flsd.uscourts.gov. (jh) Modified on 4/5/2019 (jh). (Entered: 04/05/2019)

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Defendant's Experts:

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