An owner of multiple health care facilities in the Miami area, including senior living communities, has been charged in the largest single fraud scam of its kind in history, totaling more than $1 billion, according to the Department of Justice (DOJ).
The owner, Phillip Esformes, 47, was charged with conspiracy, obstruction, money laundering and health care fraud for his role in numerous schemes across the facilities, which included skilled nursing and assisted living facilities. The facilities were known as the Esformes Network. Esformes was the owner and/or operator of Adar Associates, Eden Gardens LLC, Lauderhill Manor LLC, Flamingo Park Manor LLC and La Serena Retirement Living LLC.
“This is the largest single criminal health care fraud case ever brought against individuals by the Department of Justice, and this is further evidence of how successful data-driven law enforcement has been as a tool in the ongoing fight against health care fraud,” said Assistant Attorney General Leslie R. Caldwell.
Esformes operated the facilities where thousands of Medicare beneficiaries did not actually qualify for skilled nursing home care or for placement in an assisted living facility, according to the DOJ. Esformes and his co-conspirators—Odette Barcha, 49, and Arnaldo Carmouze, 56—allegedly admitted Medicare and Medicaid patients to these facilities where they received medically unnecessary services that were billed to the federal payers.
“Esformes is alleged to have been at the top of a complex and profitable health care fraud scheme that resulted in staggering losses—in excess of $1 billion,” said George L. Piro, special agent in charge of the FBI’s Miami Field Office. “The investigators who unraveled this intricate scam are to be commended for their diligence and commitment to root out fraud within our health care system.”
In addition, the trio charged in the criminal scheme also received kickbacks for sending the beneficiaries to other health care providers who also allegedly performed services that were medically unnecessary, according to the DOJ. The kickbacks—which came from community health centers and home health providers—were hidden from law enforcement by payments made in case or disguised as payments to charitable donations, shame lease payments or as payments for services.
The fraud charges are nothing new for Esformes, who paid $15.4 million in 2006 to resolve civil federal fraud claims for “essentially identical conduct,” according to the DOJ. He similarly admitted patients from his assisted living facility into a Miami-area hospital unnecessarily. Following the civil suit, Esformes and his co-conspiratoes allegedly adapted their scheme to avoid detection of their continued criminal activities and employed sophisticated money laundering techniques to hide their identities.
In addition to money laundering and health care fraud, Esformes and Barcha were also charged with obstructing justice. In the aftermath of the arrest of co-conspirators Guillermo and Gabriel Delgado, Esformes attempted to purchase a flight for Guillermo Delgado out of the United States to avoid trail in Miami, according to an indictment.
Barcha allegedly created fake medical director contracts to cancel and disguise kickback payments she made in exchange for patient referrals after a grand jury subpoena on June 20, 2016.
The Federal Bureau of Investigation and the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) utilized advanced analysis and forensic accounting techniques to uncover the extensive scope of the fraud scheme.
“Health care executives who exploit patients through medically unnecessary services and conspire to obstruct justice in order to boost their own profits—as alleged in this care—have no place in our health care system,” said Shimon R. Richmond, special agent in charge of the HHS-OIG. “Such actions only strengthen our resolve to protect patients and the U.S. taxpayers.”
Written by Amy Baxter