MM Curator summary:
Trump pardoned the Miami fraudster behind a $1.3B Medicare and Medicaid fraud scheme.
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In this Aug. 7, 2015, file photo, Philip Esformes arrives at the 15th Annual Harold and Carole Pump Foundation Gala held at the Hyatt Regency Century Plaza, in Los Angeles. (Rob Latour/Invision/AP)
Chicago-area nursing home mogul Philip Esformes was once called the “king” of Medicaid fraud, accused of cycling elderly, destitute and drug-addicted patients through his network of facilities and billing millions of dollars to government programs, often for services never rendered, according to federal prosecutors.
In sentencing Esformes to 20 years in prison last year, a federal judge in Miami called the length and scope of his criminal conduct “unmatched in our community, if not the country” and an “epic” violation of trust.
Now, Esformes, 52, is a free man, released from a Florida prison on Tuesday after President Donald Trump commuted his sentence, granting clemency to 20 people in all. The group included former Republican members of Congress; military contractors convicted of killing civilians in Iraq; and Chicagoan George Papadopoulos, a campaign aide who pleaded guilty to making false statements in the investigation into Russian interference in the 2016 election.
Esformes was arrested in 2016 at his Miami estate and charged with a massive $1.3 billion Medicare and Medicaid fraud scheme that at the time was billed by the U.S. Justice Department as the largest single criminal health care fraud case ever brought.
In announcing the president’s decision, the White House said the clemency was supported by former Attorneys General Edwin Meese and Michael Mukasey, as well as former Deputy Attorney General Larry Thompson.
A statement by press secretary Kayleigh McEnany alluded to Esformes’ pending appeal of his conviction, which alleged massive overreach by overzealous prosecutors who used illegally gathered evidence at trial that violated the attorney-client privilege. The statement also noted that Esformes “has been devoted to prayer and repentance” while in prison and is in declining health.
His attorney, Howard Srebnick, did not comment directly on the president’s order, but said in a statement that the comments from the White House demonstrate “that the president was deeply disturbed by the prosecutors’ invasion of the attorney-client privilege.”
The Chicago Tribune began chronicling Esformes’ rise to nursing home mogul more than a decade ago, when he, along with his father and business partner controlled a network of more than two dozen health care facilities that stretched from Chicago to Miami.
At one point, the flashy, Ferrari-driving Esformes owned millions of dollars in real estate, crisscrossing the country on private jets to spend time at his luxury condominium on Chicago’s Magnificent Mile and mansions in Miami and Los Angeles.
But allegations of fraud and neglect piled up in Chicago and Miami. A 2010 whistleblower lawsuit alleged that the giant pharmaceutical firm Omnicare Inc. paid millions in kickbacks to secure long-term contracts with Esformes’ facilities, the Tribune reported.
The Tribune also found that families had filed 20 wrongful death lawsuits over a four-year period against seven of Esformes’ facilities in Miami-Dade County, including one case where a patient was allegedly attacked by a fellow resident, then sent to another Esformes-owned facility, where he suffered a catastrophic fall and died of a brain injury.
His indictment alleged Esformes and a handful of Miami co-conspirators bilked the federal programs for 14 years by cycling some 14,000 patients through various facilities, where many received unnecessary or even harmful treatments. Drug addicts were allegedly lured to the facilities with promises of narcotics, and prosecutors say some received OxyContin and fentanyl without a physician’s order to entice them to stay.
He housed elderly patients alongside younger adults who suffered from mental illness and drug addiction — sometimes with fatal results, prosecutors alleged. In Esformes’ Oceanside Extended Care Center in Miami Beach, “an elderly patient was attacked and beaten to death by a younger mental health patient who never should have been at (a nursing facility) in the first place,” prosecutors wrote in a pre-sentencing memorandum.
As part of the kickbacks exchanged between Esformes and corrupt medical professionals, “high-end escorts” were flown to Orlando and chauffeured in limousines for liaisons with Esformes at the Ritz-Carlton Hotel, according to prosecutors.
Esformes, meanwhile, drove a $1.6 million Ferrari Aperta and published a blog with fitness tips for busy executives, prosecutors said. He even used some $300,000 in stolen proceeds to bribe the head men’s basketball coach at the University of Pennsylvania to admit Esformes’ son to the school, according to one count of the indictment.
That coach, Jerome Allen, pleaded guilty to money laundering and testified against Esformes at the Miami trial.
A jury convicted Esformes of paying bribes, money laundering, and other crimes, but was unable to reach a verdict on the main count of conspiring to defraud the Medicare program for the elderly and indigent. His appeal is pending before the 11th Circuit U.S. Court of Appeals in Florida, records show.
At his sentencing hearing in January 2019, Esformes wept and pleaded for mercy, saying “there is no one to blame but myself.” While preparing his defense, Esformes told the judge, he had listened repeatedly to wiretapped conversations that revealed him arranging bribes and was “disgusted” by what he heard.
“The Phil Esformes you heard was reckless … an arrogant man,” he said, crying as he pounded the lectern with his fist.
Prosecutors had requested 30 years behind bars. But U.S. District Judge Robert Scola Jr. said he was taking into account Esformes’ history of helping people in need.
Attorneys for Esformes had described him as a selfless philanthropist who had donated more than $15 million to synagogues, schools and needy individuals, often anonymously.