A Miami Beach health care executive was sentenced Thursday to 20 years in prison for “farming out” nursing home patients in a $1.3 billion patient-brokering scheme.
U.S. District Judge Robert Scola imposed the sentence on Philip Esformes, 50, in the biggest health care fraud case ever brought against an individual by the U.S. Justice Department, calling it a violation of trust of “epic proportions.”
Prosecutors, who sought a 30-year sentence, are seeking forfeiture of $38.5 million in Esformes’ assets.
“People who needed care, people who wanted to get better, they had no shot,” Assistant U.S. Attorney Allan Medina said. “The nature of the fraud, the conspiracy, the money-laundering scheme, was atrocious.”
“I’ve lost everything I loved and cared about,” Esformes said in a tearful apology. “There’s no one to blame but myself. I’m disgusted by what I did.”
Esformes was found guilty in April after a two-month trial on 20 of 26 charges, including paying and receiving kickbacks, money laundering and conspiracy to commit bribery as part of a scheme run through his network of more than 20 nursing homes and assisted living facilities (ALFs) in Miami-Dade County from 1998 to 2016.
Esformes and two others were indicted in July 2016 following an investigation by the FBI, the U.S. Health & Human Service’s Medicare Fraud Strike Force, the U.S. Southern District of Florida’s fraud division and Florida Attorney General’s Medicaid fraud unit.
Odette Barcha, 52, a former Larkin Community Hospital outpatient director, pleaded guilty to violating the federal anti-kickback statute and was sentenced to 15 months in prison, three years of supervised release and to pay $704,516 in restitution.
Physician’s assistant Arnaldo Carmouze, 59, pleaded guilty to accepting bribes to refer patients to Larkin and Esformes’ network. He was sentenced to six-and-a-half years in prison.
According to evidence presented at trial, Esformes bribed physicians to “cycle” patients through his nursing homes and ALFs, where they often didn’t receive appropriate medical services, or received unnecessary services, to bilk inflated payments from Medicare/Medicaid.
Witnesses testified about poor conditions and inadequate care at Esformes’ sites, operated under nine different companies registered with the state’s Division of Corporations.
Prosecutors showed Esformes avoided sanctions by bribing Florida Agency for Health Care Administration (AHCA) administrator Bertha Blanco into providing notice of inspections and to “address deficiencies” cited in confidential patient complaints.
Esformes paid Blanco $200 for each complaint and $3,000 for every unannounced inspection over a five-year span – often in bags of cash exchanged at a Doral McDonald’s – totaling more than $100,000.
Blanco, 68, the first AHCA employee ever to be charged with accepting bribes, was fired in 2016 after working at the agency for 29 years. She was sentenced in December 2017 to seven months in jail and ordered to pay $441,000 in restitution.
Evidence showed Esformes scammed at least $33 million from his nursing homes and about $5.7 million from his ALFs to make extravagant purchases, including a $1.6 million Ferrari Aperta, a $360,000 watch, two Miami Beach homes and properties in Miami, Chicago and Los Angeles.
Prosecutors proved Esformes paid former University of Pennsylvania basketball coach Jerome Allen $300,000 to recruit his son, which lowered academic entrance requirements at the Ivy League college, where he attended the Wharton School of Business.
“I got his son into Penn; I got his son into Wharton. None of that would have happened without me," Allen, now an assistant with the Boston Celtics, testified in March. He was fined more than $200,000.
When FBI agents seized Esformes’ iPhone in July 2016, they uncovered a text thread dating to 2012 with Richard Singer, the “consultant” at the center of an admissions scandal in which students without qualifying academic scores posed as recruited athletes to get into elite schools such as Yale, Stanford, Georgetown and USC.
Evidence showed Singer got Esformes’ daughter into USC as a recruited soccer player in exchange for $400,000 in payments to his Key Worldwide Foundation.
In March, Singer and 50 others – including actresses Felicity Huffman and Lori Loughlin – were charged in the scheme.
Since his July 2016 arrest, Esformes has been detained at Miami’s Federal Detention Center without bail as a flight risk after being charged with obstructing justice for plotting to help an associate convicted in a related fraud investigation to flee to Israel.