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Sandro Rosell
FC Barcelona President
Thursday, June 29, 2017

The largest ever criminal health care fraud case surfaced last week when Justice Department officials charged three people with actively utilizing a vast network of doctors, hospitals and health-care providers across South Florida to fraudulently bill more than $1 billion to Medicare and Medicaid.

As the shocking narrative continued to dominate the headlines last weekend, the story placed a proverbial spotlight on the ever increasing phenomenon of those who conspire to bilk government coffers for their own personal enrichment.

The indictment alleged that Philip Esformes, 47, the owner of more than 30 Miami-area skilled-nursing and assisted-living facilities, was the brainchild of the shady project. Along with two co-defendants and other assorted conspirators, Esformes allegedly paid and received bribes and kickbacks to get thousands of patients admitted to facilities that he operated, according to a WSJ report.

Court documents also related horrifying examples of patients who were intentionally used as medical guinea pigs for the sole purpose of billing medically unnecessary procedures to Medicare and Medicaid. Many of the treatments administered to patients were deemed harmful to their health.

Marissel Descalzo and Michael Pasano of Carlton Fields who are attorneys representing Esformes said their client “adamantly denies these allegations and will fight hard to clear his name.” They added that “Mr. Esformes is a respected and well-regarded businessman. He is devoted to his family and his religion The government allegations appear to come from people who were caught breaking the law and are now hoping to gain reduced sentences.”

The Medicare Fraud Strike Force said the case was brought as part of an interagency cooperation agreement. The Force operates in nine locations across the country and since its formation in March of 2007, it has leveled charges against 2900 defendants who have collectively billed the Medicare program for more than $10 billion, according to a WSJ report and sources close to the case.

Holding a news conference regarding the case in Miami, Assistant Attorney General Leslie R. Caldwell spoke of conniving modalities used by the defendants in order to slake their avaricious desires. “The conspirators were ruthlessly efficient” as they used the scheme to line their pockets with tens of millions of dollars, she said. Joining her at the press conference were FBI officials and the inspector general, or in-house watchdog, of the Department of Health and Human Services, which investigated the case, according to the WSJ report. They described the Esformes case as one for the record books in the nation’s long-standing battle against healthcare fraud.

They noted that while his healthcare network billed $1 billion for fraudulent medical services, Medicare paid Esformes’ skilled-nursing and assisted-living facilities about $500 million since 2009, according to a report in the Miami Herald.

“The magnitude of alleged false claims in this scheme is staggering and outrageous, even by South Florida healthcare fraud standards,” said U.S. attorney Wifredo Ferrer. “This case illustrates once again that Medicare fraud has infected every aspect of the healthcare system.”

George Piro, special agent in charge of the FBI's Miami Field Office, described the losses as “staggering.” “The investigators who unraveled this intricate scheme are to be commended for their diligence and commitment to root out fraud within our health care system,” Piro said last Friday.

ADA Caldwell offered explicit details on how the conspirators hatched their nefarious plot to get their hands on the ill-gotten gains. From 2009 to 2016, those charged in the case allegedly had patients moved between facilities after their allotted period for Medicare coverage expired. She added that the dark details of the case include allegations that drug addicted patients were prescribed with such opioids as OxyContin and Fentanyl to keep them dependent on the facility.

To ensure that a steady flow of money would line his pockets, prosecutors said that Esformes’ posited himself to receive kickbacks and bribes from other health providers for the sake of referring patients to their care, as was reported in the WSJ.

An unidentified local hospital referred some of the thousands of Medicare patients to his network according to the indictment.

The court documents also speak of a circumspect money trail and less than transparent business transactions. Court papers have alleged that the bribes were laundered in the form of purported payments to anonymous escorts who were flown to Orlando and taken by limousine to a luxury hotel. Also included in the litany of allegations were payments rendered to Esformes’ son’s basketball coach and charitable donations.

Along with Esformes, two others had money laundering and conspiracy to defraud the US charges leveled against them. They are Odette Barcha, 49, a hospital administrator and Arnaldo Carmouze, 56, a physician’s assistant. They were also charged with paying and receiving health-care kickbacks, according to the WSJ report.

Prosecutors are seeking a no-bail measure for Esformes and are asking that the presiding judge to keep him incarcerated pending his trial as a guarantee that he will appear. Prosecutors also allege that in 2014 Esformes claimed to have more than $78 million is assets and that he made a previous attempt in a Medicare fraud case to help Guillermo and Gabriel Delgado, who were charged with filing false claims for prescription drug and home healthcare services, according to the Miami Herald.

The report in the Herald also said that prosecutors claim that Eformes “repeatedly discussed funding Guillermo Delgado’s flight from the United States to Israel to avoid trial,” according to their motion to detain the Miami Beach businessman. “Attempting to carry out this plan, Esformes wrote checks to Guillermo Delgado to fund his flight from prosecution, and he encouraged Gabriel Delgado to ‘blame the empty chair’ that would be created by Guillermo’s flight to secure Gabriel’s acquittal at trial.”

The alleged flight plot was not completed, as the Delgado brothers pleaded guilty to defrauding Medicare.

Apparently, Esformes is not a stranger to legal entanglements.

The prosecutors said that Esformes continued to fleece the Medicare program even after he and others settled a civil dispute a decade ago with the U.S. government for $15.4 million over allegations of paying kickbacks to physicians in exchange for patient referrals to Larkin Community Hospital. In 2006, Esformes owned a chain of assisted-living facilities and supplied patients to the local hospital as part of the scheme, according to the settlement, as was reported by the Miami Herald.

In a separate case, Esformes and his father, Morris Esformes, agreed to pay $5 million to settle a federal whistleblower lawsuit just six days before it was to go to trial in 2013, according to a report at McKnight’s news agency. They were charged with accepting a multi-million dollar kickback from pharmacy giant Omnicare in 2004. The kickback allegedly came as part of a $32 million payment for Total Pharmacy, which was partially owned by Philip Esformes. In exchange for the money, Omnicare secured pharmacy contracts with two dozen nursing homes affiliated with the Esformeses, the suit charged.

Yedidya Borenstein