MIAMI — Philip Esformes, owner of the Esformes Network of more than 30 Miami-area skilled nursing and assisted living communities, has been charged with conspiracy, obstruction, money laundering and healthcare fraud in connection with a $1 billion Medicare scam.
The U.S. Department of Justice brought the charges against Esformes, along with Odette Barcha, a hospital administrator, and Arnaldo Carmouze, a physician’s assistant.
“This is the largest single criminal healthcare fraud case ever brought against individuals by the Department of Justice,” according to Leslie Caldwell, assistant attorney general.
According to the indictment, Esformes admitted unqualified residents to his facilities, and then billed Medicare for services that were either medically unnecessary or never performed at all.
Esformes, Barcha and Carmouze are also charged with running a network of kickback payments for steering those residents to other healthcare providers, which also performed and billed Medicare and Medicaid for unnecessary procedures. In order to hide the kickbacks from law enforcement, payments were often made in cash or disguised as charitable donations, payments for services and sham lease payments, court documents allege.
“Esformes is alleged to have been at the top of a complex and profitable healthcare fraud scheme that resulted in staggering losses — in excess of $1 billion,” says George Piro, special agent in charge. “The investigators who unraveled this intricate scam are to be commended for their diligence and commitment to root out fraud within our healthcare system.”
The obstruction charges stem from 2014 when Esformes and Barcha allegedly tried to fund a co-conspirator’s flight from the United States to avoid trial in Miami.
This is not Esformes’ first time accused of fraud. In 2006, Esformes paid a $15.4 million civil settlement for “essentially identical conduct,” according to the Department of Justice. But rather than stopping the behavior, the court documents allege, Esformes and his co-conspirators simply improved their money laundering techniques and continued on with their operation.