Man Who Bribed Son Into Penn Guilty in $1.3 Billion Health Fraud

(Bloomberg) -- A Florida man was convicted Friday of running an 18-year, $1.3 billion health-care fraud that prosecutors called the largest such scheme ever charged by the Justice Department.

Philip Esformes, a 50-year-old Miami Beach resident, used a network of nursing homes and assisted-living facilities in South Florida to defraud U.S. government health-care programs while providing inadequate and unnecessary care to patients, prosecutors said.

Esformes made off with at least $37 million for himself from 1998 to 2016, according to prosecutors, using the money to finance a lavish lifestyle of fancy cars and a $360,000 watch. Esformes also used some of the proceeds from the fraud to bribe the University of Pennsylvania basketball coach to help get his son into the school, prosecutors said. The coach pleaded guilty to money laundering last year in connection with the case.

An attorney for Esformes didn’t immediately respond to requests for comment.

Read more: Celtics assistant coach is said to have taken bribes at Penn

Prosecutors said Esformes bribed doctors to admit patients to the facilities he operated. The patients didn’t get appropriate care and sometimes received unnecessary services for which Esformes then billed the U.S. government. Esformes also bribed a Florida state regulator to learn about surprise inspections of company facilities ahead of time, prosecutors said.

The total of fraudulent claims that Esformes’ companies submitted to Medicare and Medicaid exceeded $1.3 billion, according to prosecutors.

A jury found Esformes guilty on 20 counts in U.S. district court in the Southern District of Florida. Charges included conspiracy to defraud the United States, receiving kickbacks, money laundering and conspiracy to commit bribery. Two co-conspirators pleaded guilty. Sentencing hasn’t been scheduled.

More than 4,000 Medicare fraud cases have been charged since 2007 by a special group of federal investigators. Medicare, which covers about 60 million mostly older Americans, and Medicaid, which covers 75 million low-income people, are considered by the Government Accountability Office to be vulnerable to fraud and abuse.

More than $700 billion, or 17 percent of federal spending, flowed through the Medicare program in 2017, according to the GAO. About $48 billion of that was considered improper -- either payments in the wrong amount or that shouldn’t have been made at all. Improper payments aren’t necessarily fraudulent.

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