Nov. 21--Philip Esformes, the Miami Beach healthcare mogul sentenced to 20 years in a massive Medicare fraud case, must pay more than $44 million to the taxpayer-funded program and U.S. government, a federal judge decided Thursday.
Esformes, found guilty of various bribery, kickback and money-laundering charges, was ordered to reimburse $5 million in losses incurred by the Medicare system and pay about $39 million in a forfeiture judgment to the U.S. government as punishment for his crime. He also must pay an additional $617,000 for the government's cost of his incarceration.
Justice Department prosecutors urged U.S. District Judge Robert Scola to make Esformes pay dearly with his deep pockets, proposing $207 million in restitution to Medicare. But Scola opted to go with a "conservative" loss to the government's health insurance program based on evidence at the executive's trial in April.
The judge, however, agreed with the prosecutors' forfeiture proposal. "I gave him a lesser number of years in prison in anticipation of a significant financial penalty," Scola said in Miami federal court.
After his arrest in 2016, Justice Department prosecutors touted Esformes' Medicare fraud case as the biggest in the nation's history, totaling $1 billion in bogus billing by his chain of skilled-nursing and assisted-living facilities and by other healthcare operators who collaborated with him in Miami-Dade County. At Thursday's hearing, prosecutors struggled with mathematically showing that Medicare lost hundreds of millions of dollars as a result of his facilities filing false claims.
Prosecutor Elizabeth Young tried to convince the judge that Esformes should be slammed for fleecing Medicare because he paid bribes and kickbacks to doctors in order to generate thousands of elderly and mental health patients who did not need or receive actual services over a decade.
"Unlike defendants in other cases, this defendant is actually capable of paying this amount," Young said, arguing for $207 million in restitution to Medicare. She cited his business interests that have been sold by the government, the value of his homes in Miami Beach, his bank accounts and other assets, including a watch collection.
But Esformes' defense attorney, Howard Srebnick, reminded the judge that while his client was convicted at trial, the 12-person jury was unable to reach a verdict on the main charge of conspiring to commit Medicare fraud.
Srebnick argued that Esformes' chain of skilled nursing facilities cared for some 14,000 patients and that prosecutors failed to prove that any of them were illegitimate at trial. "No one can name a single patient who fits that category," he said, suggesting Medicare's loss from Esformes' crime was between $4 million and $5 million.
Esformes, 51, who has been held at the Federal Detention Center in Miami since his arrest in July 2016, was not present at Thursday's hearing. His legal team, consisting of Srebnick, Roy Black and Jackie Perczek, has filed an appeal of his conviction and sentencing.
At his sentencing in September, Esformes gave an emotional speech that generally acknowledged his criminal life but also sought mercy.
"Your honor, I don't want this [crime] to be the only legacy I leave behind," said Esformes, whose lawyers and supporters in the courtroom spoke of his personal and financial charity, especially in the Jewish, medical and academic communities.
Justice Department prosecutor Allan Medina said Esformes not only exploited patients to line his pockets at his chain of 16 assisted-living and skilled-nursing facilities, but "corrupted" the whole Medicare system in his zeal to fill patient beds. Esformes himself made $38 million from Medicare payments between 2010 and 2016, he said.
"He has no excuse for what he did," Medina said. "He has no respect for the law. He has no remorse whatsoever."
In April, Esformes went to trial alone because two key conspirators -- a physician's assistant and a former Larkin Hospital administrator who recycled patients for cash -- had pleaded guilty. Several other healthcare associates charged with Medicare fraud in related cases had also pleaded guilty and cooperated with federal prosecutors, including some who testified against him.
At trial, convicted healthcare operators, the former hospital administrator and an ex-Ivy League basketball coach testified that Esformes paid them and various doctors hundreds of thousands of dollars in bribes to buy and sell patients as well as to get Esformes' son into the University of Pennsylvania.
With Esformes' corporate and personal assets frozen, his father, Morris, has paid for the son's costly defense.
The father, with his son's assistance, had amassed a fortune in the healthcare field in Chicago before they set their sights on Miami, where they got into trouble with the law for the first time in 2006.
Back then, the Esformes family and the owners of Larkin Hospital paid more than $15 million to the U.S. government in a Justice Department settlement to resolve a civil violation of recycling patients between the hospital and the family's nursing-home facilities and ALFs -- a precursor to the latest criminal case.
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