Feds Ask for $38M Judgment in Record-Setting Nursing Home Fraud Case

When the man at the center of a record-setting nursing home fraud case faces a sentencing hearing this week, he’ll also be staring down a nearly $39 million recovery judgment.

The federal government has asked a judge to approve a plan that would force Philip Esformes, convicted earlier this year on 20 fraud-related counts, to forfeit $38.7 million in funds gained through his money laundering crimes.

Legal publication Law360 first reported on the news late last week.

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Esformes, a Miami-area businessman, used his Esformes Network of skilled nursing and assisted living facilities to defraud Medicare and Medicaid for more than $1 billion, according to the Department of Justice; that total made his case the largest single criminal health fraud action that the DOJ has ever taken against individuals, assistant attorney general Leslie Caldwell said back in 2016.

The disgraced former owner could spend the rest of his life in prison, but the federal government’s request seeks to extract an additional financial penalty.

A jury determined that several of Esformes’s businesses were directly involved in a money laundering scheme, and thus the government claims that it can collect the $38 million as part of its punishment — a figure that it describes as only a portion of Esformes’s overall financial liability.

“The amount of the forfeiture money judgment sought is a very conservative sum that is equal in value to property traceable, from 2010 through 2016 only, to the property involved in the Defendant’s money laundering offenses,” U.S. attorney Ariana Fajardo Orshan argued in a motion filed in the U.S. District Court for the Southern District of Florida.

Esformes’s conspiracy to defraud the government through money laundering dates back to January 2002, according to officials.

Of the total judgment sought, about $28.8 million came from Esformes’s skilled nursing facilities, according to a supplemental exhibit filed Monday.

The case garnered national attention due to the scope of the fraud and Esformes’s high-flying lifestyle, with a Miami Herald report pointing to his Ferrari and “pricey real estate” in Miami Beach. Esformes had also previously paid the Department of Justice $15.4 million to settle separate allegations of “recycling patients” between a local hospital and his group’s SNFs and assisted living properties, the Herald noted.

Esformes’s sentencing hearing is scheduled for Thursday in a Miami courtroom before U.S. District Judge Robert Scola.