This One’s a Whopper

37181520 - doctors and nurses walking in hospital hallway, blurred motion.

Whopper, colossal, enormous, gargantuan – these are all words that could describe a $1 billion healthcare fraud scheme masterminded by the owner of a Miami, Florida-based healthcare facility empire. The players in this game of fraud include the executive’s father, many medical professionals, a hospital administrator, two licensed nurses who turned on the business owner and an ex-Ivy League basketball coach. (Very interesting in light of the current college admittance scandal going on.) Needless to say, this man is in a lot of trouble. He is facing life in prison for fleecing the Medicaid and Medicare programs in what is touted as the “biggest Medicare fraud case in the country” to date.

Prosecutors in today’s fraud case had a few choice words for the business owner from Miami. During court proceedings, he was described as an “obsessive businessman,” who owns a chain of 16 skilled nursing homes and assisted living facilities. He was also referred to as a “vampire who preyed on hospital patients to fill the beds” in his healthcare facilities.

The 50-year-old man went to trial facing 26 charges related to healthcare fraud – bribery, paying and receiving kickbacks, money laundering and obstruction of justice – all because he tried to generate a steady stream of government healthcare patients through his businesses. (Then, he billed Medicare and Medicaid for $1 billion in questionable services that the patients really didn’t need. In some cases, they didn’t even receive the services claimed.)

As you know, a healthcare fraud scheme as large as this one cannot be carried out without the help of other co-conspirators. The skilled nursing home facility owner went to trial mainly because of two fellow conspirators – a physician’s assistant and a former hospital administrator who provided a steady stream of patients for cash. (They pleaded guilty to their involvement in the case, then ratted on their leader most likely for the purpose of getting a reduced sentence. Other healthcare associates cooperated with federal prosecutors for the same reason.)

During the trial, two convicted healthcare operators, the former hospital administrator and an ex-Ivy League basketball coach testified against the business owner. They all claimed that the Miami mastermind paid them and other doctors hundreds of thousands of dollars in bribes to funnel thousands of Medicaid and Medicare patients through his facilities. (The defendant also paid the former basketball coach $300,000 in cash bribes and wire transfers to put his son on a preferred waiting list as a “recruited basketball player” so he could get into college.) The defendant also referred his own patients to other healthcare fraud offenders in exchange for kickbacks. Today’s fraudster was convicted of obstructing justice because he plotted with two of his co-conspirators, who were brothers, to help one of them leave the country to avoid trial. (So he wouldn’t testify against him.) Over six years, the businessowner received $38 million from the two government healthcare programs.

The 50-year-old skilled nursing facility owner was found guilty on 20 counts in this healthcare fraud case. As a result, his assets have been frozen. (Even though the Miami man recently went through a messy divorce, it appears he still has some expensive real estate in Miami beach and a Ferrari. Perhaps the government will seize those too if they are traceable to the proceeds of his heinous crime.) Interestingly enough, the deceptive man’s father paid for his son’s very expense defense attorney. Apparently, the son had previously helped the father make a fortune in the healthcare field in Chicago before they launched the Miami scheme. (Check out today’s article to find out more about a previous $15.4 million settlement regarding the family’s nursing-home facilities and assisted living facilities.)

Congratulations to the Medicare Strike Force for bringing down this devious empire located in Miami, a hotbed for government healthcare fraud. A combination of federal law enforcement and government agencies stopped this man from using elderly, disabled and poor patients as a commodity and the government as a bank. You’ll be happy to know that this criminal has been held without bond since July 2016. When sentenced, he could face life in prison. (That would be quite a huge victory for the government and a ginormous sentence for the defendant who committed a whopper of a crime.)

Today’s “Fraud of the Day” is based on an article entitled, “Miami healthcare exec Philipi Esformes found guilty of paying kickbacks and bribes,” published by the Miami Herald on April 5, 2019.  

Philip Esformes, an obsessive businessman who built an empire of healthcare facilities in Miami-Dade, was found guilty Friday of 20 charges, including paying bribes and kickbacks, in a scheme to generate streams of Medicare patients for his businesses.

The wealthy Miami Beach executive managed his chain of skilled-nursing and assisted-living facilities with an iron hand, with prosecutors arguing he had billed $1 billion to the federal health insurance program for questionable services that patients largely didn’t need or even receive.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.