ALF owner accused in $1 billion fraud scheme ordered held without bond

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ALF owner accused in $1 billion fraud scheme ordered held without bond
ALF owner accused in $1 billion fraud scheme ordered held without bond

Philip Esformes, the owner of several Florida assisted living and skilled nursing facilities who was accused earlier this year of leading a $1 billion fraud scheme, will continue to be held in the Miami Federal Detention Center without bond, a judge ruled last week.

Miami U.S. District Judge Joan A. Lenard issued his final ruling on Sept. 28. Prosecutors were concerned that Esformes might try to flee or obstruct justice if he was released while awaiting trial, the Chicago Tribune reported on Tuesday.

As McKnight's Senior Living reported in late July, Esformes was among those charged with conspiracy, obstruction, money laundering and healthcare fraud in connection with a $1 billion scheme that government officials called “the largest single criminal healthcare fraud case ever brought against individuals by the Department of Justice.” Government officials said that Esformes led the effort.

When residents of Esformes' SNFs would near or arrive at the end of Medicare's 100-day post-hospital benefit period for skilled nursing, they would be moved to his ALFs, according to a motion to detain Esformes pending trial filed by the federal government. “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,” the document said.

Meanwhile, according to the motion, 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. “Many of these services, however, were not medically necessary or were never provided,” the court document stated.

So that they would be hidden from law enforcement, the kickbacks often were paid in cash or were disguised as payments to charitable donations, payments for services and sham lease payments, according to the government.

The motion to detain pointed out that although the Medicare program does not directly reimburse ALFs for the care and services they provide, the program does pay physicians, home health agencies, pharmacies and other providers for services they deliver to ALF residents. Also, the motion noted, the Medicaid program pays for some assisted living expenses that some residents incur.

Since Esformes was charged in July, prosecutors have alleged new claims of harm to residents as well as corruption, according to the newspaper.

Esformes, the Tribune reported, “has strenuously protested his innocence.” His attorney, Michael Pasano, told the media outlet: “Mr. Esformes stands by his lifelong record of hard work and success, of providing quality service to people in his nursing homes, and of helping persons in need. He adamantly denies any wrongdoing and promises to fight vigorously to show the truth behind the lies being brought against him.”

More than 30 family members, friends and rabbis had pledged approximately $3 million to help Esformes obtain bond, according to the Miami Herald. Esformes had offered to pay for around-the-clock monitoring in his home, with limited visitation and no internet or cell phone use, according to the Tribune.

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