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Analysis

Convicted Florida Health Care Exec Gets 20 Year Prison Term for $1.3B Fraud Scheme

By John Commins  
   September 13, 2019

Philip Esformes of Miami Beach ran the largest healthcare fraud scheme ever charged by DOJ.

The Miami-based owner of a chain of skilled nursing and assisted living facilities has been sentenced to 20 years in federal prison for his lead role in a decades-long scam that the Department of Justice has called the largest healthcare fraud scheme it ever prosecuted.

Philip Esformes, 50, of Miami Beach, was also sentenced to three years supervised release.

During an eight-week jury trial in April, federal prosecutors accused Esformes of billing Medicare for more than $1.3 billion in fraudulent charges. The jury found Esformes guilty of more than 20 felony fraud counts, including accepting kickbacks, money laundering, fraud, and obstruction of justice. 

A Nov. 21 hearing will determine restitution and forfeiture, DOJ said.

"Philip Esformes is a man driven by almost unbounded greed," Deputy Special Agent in Charge Denise M. Stemen of the FBI’s Miami Field Office said in a media release.

"The illicit road Esformes took to satisfy his greediness led to millions 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," Stemen said.

Evidence presented at trial showed that, between 1998 and 2016, Esformes led an extensive healthcare fraud conspiracy involving a network of assisted living facilities and skilled nursing facilities he owned, DOJ said.

Esformes bribed physicians to admit patients into his facilities. Then, he cycled the patients through his facilities where they often failed to receive appropriate medical services or received medically unnecessary services billed to Medicare and Medicaid. Several witnesses testified to the poor conditions in the facilities and the inadequate care patients receive.

Esformes hid the shoddy conditions from authorities by bribing an employee of a Florida state regulator for advance notice of surprise inspections at his facilities.

Evidence showed Esformes used his stolen money for extravagant gifts, including luxury automobiles and a $360,000 watch. He also used the stolen money to bribe the basketball coach at the University of Pennsylvania to gain admission for his son. 

Altogether, Esformes personally pocketed about $37 million from the scheme, DOJ said. 

Esformes’s coconspirator, physician’s assistant Arnaldo Carmouze, previously pleaded guilty to fraud charges and was sentenced in April to more than 6 years in prison and ordered to pay $12.5 million in restitution.

Co-conspirator Odette Barcha also pleaded guilty to a kickback charge and was sentenced in April to 15 months in prison and three years of supervised release and was ordered to pay $704,500 in restitution.

“Philip Esformes is a man driven by almost unbounded greed. ”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

Photo credit: Mark Van Scyoc / Shutterstock.com


KEY TAKEAWAYS

Between 1998 and 2016, Philip Esformes led a massive healthcare fraud conspiracy involving a network of assisted living facilities and skilled nursing facilities he owned.

Esformes bribed physicians to admit patients into his facilities. Then, he cycled the patients through his facilities where they often failed to receive appropriate medical services or received medically unnecessary services billed to Medicare and Medicaid. 

Esformes hid the shoddy conditions from authorities by bribing an employee of a Florida state regulator for advance notice of surprise inspections at his facilities.


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