The owner of more than 30 skilled-nursing and assisted-living facilities in the Miami area and two co-conspirators have been charged for their involvement in a $1 billion Medicare fraud and money laundering scheme, federal prosecutors said Friday.
The indictment marks the largest criminal healthcare fraud brought against individuals by the U.S. Justice Department, according to Assistant Attorney General Leslie Caldwell, who noted that the charges stemmed from a data-driven investigation.
According to the indictment, Philip Esformes, 47, ran the massive scheme by billing Medicare and Medicaid for medically unnecessary services provided at his network of skilled-nursing and assisted living facilities. Prosecutors alleged Esformes and two others named in the indictment—hospital administrator Odette Barcha, 49, and physician's assistant Arnaldo Carmouze, 56—also received kickbacks for sending patients to community mental health centers, home health care providers and other medical facilities who also participated in the conspiracy, garnering tens of millions of dollars from the scheme.
“All of this was done with little regard for the patients,” Caldwell said. “Among the thousands of people cycled through the fraudulent network were, for example, drug addicts who were allegedly prescribed opioids—including OxyContin and Fentanyl—and other narcotics in order to entice them to stay in facilities where they didn't belong.”
The three face various counts of conspiracy, obstruction, money laundering and healthcare fraud.
Prosecutors also charged Esformes with obstructing justice, alleging Esformes tried to pay for another co-conspirator's flight to avoid trial in Miami after his arrest. Barcha has also been charged with obstructing justice for creating sham medical director contracts in an effort to hide her involvement in the conspiracy after receiving a grand jury subpoena last month.
“Healthcare executives who exploit patients through medically unnecessary services and conspire to obstruct justice in order to boost their own profits—as alleged in this case—have no place in our healthcare system,” said Shimon Richmond, special agent in charge of the FBI's Miami field office. “Such actions only strengthen our resolve to protect patients and the U.S. taxpayers.”
Esformes has been accused of similar conduct in the past. He paid a $15.4 million settlement in 2006 for similar fraudulent activity at his assisted living facilities, according to court documents.
South Florida has been a hotbed for Medicare fraud, according to Caldwell. A month ago, the DOJ announced it had taken down another Medicare fraud scheme in the area worth $900 million and included more than 100 defendants in the South Florida area.
