DOJ Reopening Medicare Fraud Case Against Philip Esformes – Nursing Home Mogul Pardoned by Trump

The Department of Justice (DOJ) is attempting to reopen the case of nursing home mogul Philip Esformes – convicted of one of the biggest Medicare frauds in history – and whose 20-year sentence was commuted by President Donald Trump, and an article in Mother Jones magazine provides a deeper look into the case.

Together with his father, Morris, Esformes came to co-own a slew of skilled nursing facilities (SNFs) and assisted living facilities (ALFs) spread out over Illinois, Missouri and Florida. Their assets also included a Miami-area hospital, which was used to approve the hospital stay requirement.

According to the article in Mother Jones’ latest issue, the father and son duo filled empty beds with convicts and younger psychiatric patients.


“Most of Esformes’ SNF patients were covered by Medicare at rates of up to about $800 per day,” the article notes.

And in their attempt to fill up SNF beds to 100% capacity, the father-son team disregarded strict eligibility rules that allow for a SNF stay to be paid by Medicare, including the coverage limit of 100 consecutive days, specific discharge rules, three-day hospital stay, among others. The Esformes were also able to bypass the rules by bribing doctors to sign off.

They drew referrals from “ethically flexible physicians and assisted living owners. They would pick up the check for parties at high-end restaurants and nightclubs and even invite sex workers to entertain doctors,” the article notes. 


To justify admission, court records show “unscrupulous doctors deployed a common set of descriptions, exaggerated or wholly fictitious: unsteady gait, weakness, muscle wasting,” the Mother Jones piece notes.

Meanwhile, Larkin Community Hospital, in which the Esformeses owned a stake, often staged the three-day stays that made patients eligible for SNF reimbursement.

And after exhausting Medicare’s 100-day skilled nursing limit, the patients were frequently transferred to one of Esformes’ assisted living homes, where, after 60 days, they became eligible for another round of skilled nursing, the article says.

Moreover, the illegal payments were disguised using fake invoices and phony leases and consulting agreements.

The Mother Jones piece also notes that the DOJ’s “postclemency showdown … may well be unique in the annals of American jurisprudence.”

Difficult as it was, the DOJ found a way to reopen the Esformes case. Even though the double-jeopardy principle protects defendants in the U.S. legal system from re-prosecution, it only applies to charges for which jurors have rendered a verdict. And, in the Esformes case, although the jury convicted him on more than two dozen charges, they weren’t able to reach a verdict on a handful of others. This included the most important count, that of the conspiracy to commit health care and wire fraud.

So far, Esformes has lost several appeals while the Supreme Court declined to stay his prosecution in March. And now, a hearing to determine the new date for the Miami trial is scheduled for November.

The Esformes’ were big donors to philanthropic causes, funding charities from Chicago to Israel. They exploited this very network built through charitable groups – which included a reach to Trump’s son-in-law Jared Kushner and influential Rabbis – to gain clemency from Trump, the article states.

The piece also details the process that the Esformes’ used to gain influence in the halls of power, including through a lobby group formed by the elder Esformes in the 1990s.