Trump Commutes 20-Year Sentence In Massive Miami Medicare Fraud Case

Dec. 23—Philip Esformes, a former Miami Beach healthcare mogul convicted of playing a central role in one of the nation's biggest Medicare fraud cases and using his ill-gotten millions to pay bribes for favors, won a commutation of his 20-year sentence from President Donald Trump Tuesday night.

Esformes, convicted of paying bribes, money laundering and other charges, was also ordered to pay $44 million to the taxpayer-funded Medicare program and the U.S. government after a grueling 2019 trial prosecuted by the U.S. Attorney's Office in Miami and Justice Department. Trump's commutation did not overturn that restitution order.

A handful of former federal prosecutors in South Florida questioned Trump's clemency decision.

"In a perfect world, a commutation would be the result of a thoughtful, apolitical process intended to offset a grave injustice," said former federal prosecutor Ben Curtis, who has tried dozens of Medicare fraud cases in Miami and across the country. "Did that happen here? Seeing this decision today and knowing the history of healthcare fraud in South Florida, it's tough not to become cynical about the justice system."

At his sentencing in September 2019, U.S. District Judge Robert Scola called Esformes' scheme to generate thousands of Medicare patients for his chain of assisted-living and nursing-home facilities in Miami-Dade "unmatched in our community, if not our country" and said he "violated [the system's] trust in epic proportions."

Esformes, 52, was among 20 people — mostly political cronies of the president implicated in scandals that marred his first term in office as well as the Republican Party — that were granted a full pardon or commutation of all or part of their sentences.

But in many ways, Trump's commutation of Esformes' sentence was an outlier of sorts because he did not appear to have any political relationship to the president over his 30 years in the healthcare business. Esformes has never written a check to support Trump, according to Federal Election Commission records. If anything, Esformes, his former wife, Sherri, and his father, Morris, have been donors to the Democratic Party candidates.

Esformes and his wife gave $100,000 combined in 2012 to support President Barack Obama's reelection. Sherri also gave $17,600 in 2010 to support the Democratic Congressional Campaign Committee. That same year Philip Esformes, Inc. gave $10,000 to the Florida Democratic Party, according to Florida campaign finance records.

A statement issued by the White House noted that Esformes' commutation was "supported" by former U.S. Attorney General Edwin Meese, who served under President Ronald Reagan, and Michael Mukasey, who served under President George W. Bush, as well as by former Deputy Attorney General Larry Thompson, who also served in the Bush administration.

The statement also highlighted that Esformes' federal appeal of his 20-year sentence was backed by Meese, former Attorney General John Ashcroft and Attorney General Alberto Gonzales, who both served in the Bush administration. Kenneth Starr, a GOP lawyer best known as an independent counsel who investigated President Bill Clinton, also backed the appeal.

The statement alluded to their support of Esformes' appeal "challenging his conviction on the basis of prosecutorial misconduct" by lawyers in the U.S. Attorney's Office and Justice Department relating to an FBI search and seizure of records from the healthcare executive's office in one of his Miami-Dade facilities. Esformes' trial attorneys argued that the search violated "attorney-client privilege" between the businessman and his corporate lawyer, and that no records seized from that office should have been used at his trial.

"While in prison, Mr. Esformes, who is 52, has been devoted to prayer and repentance and is in declining health," the White House statement concluded.

One of Esformes' trial attorneys, Howard Srebnick, declined to comment on the president's commutation of his client's sentence, but he said the convicted defendant's appeal mirrored his petition to the president. In a statement, Srebnick alluded to a Miami magistrate judge's 113-page report "detailing the prosecutorial misconduct that we exposed" before trial — a decision that was later overturned by Scola, the federal judge, who allowed the evidence gathered at Esformes' office.

"The White House press release demonstrates that the president was deeply disturbed by the prosecutors' invasion of the attorney-client privilege," Srebnick, who represented Esformes with partner Roy Black, said in his statement.

In April 2019, a 12-person federal jury in Miami found Esformes guilty of most of the 26 charges brought against him in an indictment filed after his arrest in 2016. Jurors, however, did not reach a verdict on the main count — that Esformes had conspired to defraud the Medicare program for the elderly and indigent.

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.

The deadlocked verdict on the main conspiracy count against Esformes came as a surprise because jurors found Esformes guilty of bribery and paying and receiving kickbacks to generate Medicare patients for his facilities as well as those of other healthcare operators.

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. Esformes himself made $38 million from Medicare and Medicaid payments between 2010 and 2016.

Esformes' defense team tried to show that his patients, whether coming out of hospital surgery or suffering from mental illness, received the care they needed in his facilities under Medicare and Medicaid coverage.

Even by the standards of Miami's rampant Medicare rackets, Esformes' case stuck out for its sheer size. Before his assets were frozen after his arrest in July 2016, the Chicago transplant owned dozens of local healthcare businesses that billed $1 billion to Medicare and Medicaid over a decade. Esformes, who went through a messy divorce, also acquired pricey real estate in Miami Beach and drove a Ferrari sports car.

Before Scola issued his punishment, the wealthy Miami Beach business executive sobbed as he apologized to the judge.

"I lost everything I loved," Esformes said, admitting he was a "broken" man who was "disgusted" by his criminal activity. "I destroyed my marriage. I scarred my three children. There is no one to blame but myself. I accept responsibility for what I have done and regret it."

"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 without providing actual care.

"He corrupted the entire system — the Medicare and Medicaid system," Medina said. "Philip Esformes had every opportunity. He had wealth, [making] $78 million in 2017. ... He has no excuse for what he did. He has no respect for the law. He has no remorse whatsoever.

"He was the boss," Medina said. "He bullied people to get what he wanted."

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