Philip Esformes, the former assisted living and skilled nursing facility owner who was sentenced to 20 years in prison for his role in a case that the federal government valued at $1 billion and described as “the largest healthcare fraud scheme charged by the U.S. Justice Department,” had his sentence commuted by President Donald Trump last night. It’s one of two new commutations with assisted living connections.
“While in prison, Mr. Esformes, who is 52, has been devoted to prayer and repentance and is in declining health,” the White House said in the announcement.
Esformes was one of 20 individuals granted full pardons or sentence commutations yesterday. The president also commuted the remainder of a term of supervised release for a woman who had been found guilty of orchestrating a $205 million Medicare fraud scheme that involved paying bribes and kickbacks to owners and operators of assisted living facilities and others (see below).
The commutation for Esformes leaves intact other aspects of his sentence, including supervised release and restitution. He previously had been ordered to pay $44 million to the Medicare program.
Esformes had been appealing the sentence, handed down in September 2019 after he had been found guilty in April 2019 of more than 20 charges of money laundering, paying and receiving kickbacks, bribery and obstruction of justice.
As McKnight’s Senior Living previously reported, the federal government in part alleged in 2016 that Esformes would move skilled nursing residents to his assisted living facilities when they were at or near the end of Medicare’s 100-day post-hospital benefit period for skilled nursing. “After the required 60-day waiting period between consecutive admissions to an [sic] SNF, a physician or physician assistant would readmit the beneficiary to the hospital, re-initiating the cycle,” according to a federal motion.
Meanwhile, the government alleged, Esformes provided access to assisted living residents “for any healthcare provider willing to pay a kickback” — including pharmacies, home health agencies, physician groups, therapy companies, partial hospitalization programs, laboratories and diagnostic companies — even though many of the services for which they were paid were not medically necessary or were never provided.
Esformes faced 26 charges overall, including conspiracy, obstruction, money laundering and healthcare fraud, in connection with the scheme. The jury, however, did not reach a verdict on the main count, that Esformes had conspired to defraud the Medicare program.
The White House said that the commutation was supported by former Attorneys General Edwin Meese and Michael Mukasey, as well as former Deputy Attorney General Larry Thompson. “In addition, former Attorneys General Edwin Meese, John Ashcroft, and Alberto Gonzalez, as well as other notable legal figures such as Ken Starr, have filed in support of his appeal challenging his conviction on the basis of prosecutorial misconduct related to violating attorney-client privilege,” the statement said.
Commutation for Judith Negron, too
Also announced at the same time as Esformes’ sentence commutation was Trump’s commutation of the remainder of Judith Negron’s term of supervised release. The president had commuted her term of incarceration in February after she had served eight years of her 35-year sentence.
Negron, the former co-owner of Miami-based American Therapeutic Corp., in December 2011 had been sentenced to prison for orchestrating a $205 million Medicare fraud scheme that involved paying bribes and kickbacks to owners and operators of assisted living facilities and others. At the time, it was one of the longest prison terms ever imposed in a Medicare Fraud Strike Force case, according to a 2011 Justice Department press release. The sentence also included three years of supervised release, and Negron and two co-defendants also were ordered to pay $87 million in restitution.
Negron previously told the Associated Press that her case was brought to the attention of the president by people such as Alice Johnson, who received clemency in June 2018 after lobbying by reality TV star Kim Kardashian West. Johnson, according to the AP, had been serving time since a 1996 conviction on charges related to a Memphis, TN-based cocaine-trafficking operation.
“During her incarceration, Ms. Negron dedicated her time to improving her life as well as the lives of her fellow inmates. She completed hundreds of hours of educational programs, served as a tutor, and mentored other inmates,” the White House said Tuesday in the announcement. “Her acts of selflessness won her the praise of her prison warden.”
In addition to the prison warden, the original clemency for Negron was supported by Johnson, the Clemency for All Non-Violent Drug Offenders Foundation and Change.org, according to the White House. “Former Florida Attorney General Pam Bondi supports the President’s further act of clemency today,” the Tuesday announcement said.