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The Department of Justice (DOJ) recently reported on the conviction of a man in South Florida for his role in a $1.3 billion health care fraud scheme.  Philip Esformes (Esformes), 50, of Miami Beach, Florida, owned several skilled nursing and assisted living facilities and organized a scheme involving the submission of fraudulent claims to Medicare and Medicaid for services that were not provided, were not medically necessary or were obtained through kickbacks.  He was convicted of: 1) one count of conspiracy to defraud the U.S.; 2) two counts of receipt of kickbacks in connection with a federal health care program; 3) four counts of payment of kickbacks in connection with a federal health care program; 4) one count of conspiracy to commit money laundering; 5) nine counts of money laundering; 6) two counts of conspiracy to commit federal program bribery; and 7) one count of obstruction of justice.

According to the trial evidence, the health care fraud conspiracy took place from January 1998 through July 2016.  The scheme involved Esformes bribing physicians to admit their patients to his facilities, then cycling the patients through the facilities where they would receive unnecessary or inappropriate medical services.  Those services were then billed to Medicare and Medicaid.  In addition, several witnesses evidenced that the facilities were in poor condition.  However, Esformes bribed an employee of a Florida state regulator to receive advance notices of any inspections of his facilities to conceal the poor conditions from authorities.  The evidence also showed that Esformes used the proceeds of his criminal actions to purchase luxury goods and bribe a basketball coach at the University of Pennsylvania (University) in exchange for assistance with his son’s admission into the University.  Esformes personally benefited from the fraud and received more than $37 million.

Esformes’s two co-conspirators pleaded guilty to conspiracy to commit health care fraud and violate the Anti-Kickback Statute.  One co-conspirator was sentenced on April 3rd to 15 months in prison, three years of supervised release, and a payment of $704,516 in restitution.  The other co-conspirator will be sentenced on April 10th and Esformes’s sentencing date has not yet been scheduled.

The Federal Bureau of Investigation, Department of Health and Human Services Office of Inspector General, and Medicare Fraud Strike Force, with supervision and assistance from the DOJ Criminal Division’s Fraud Section, U.S. Attorney’s Office for the Southern District of Florida, and Florida Attorney General’s Office Medicaid Fraud Control Unit, investigated this case.

The DOJ press release is available at:

https://www.justice.gov/opa/pr/south-florida-health-care-facility-owner-convicted-role-largest-health-care-fraud-scheme-ever

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