Miami-Dade County

Beach exec charged in $1 billion Medicare fraud struggles to get bail

Philip Esformes arrives at the 15th Annual Harold and Carole Pump Foundation Gala held at the Hyatt Regency Century Plaza in August 2015.
Philip Esformes arrives at the 15th Annual Harold and Carole Pump Foundation Gala held at the Hyatt Regency Century Plaza in August 2015. Rob Latour/Invision/AP

A long lineup of rabbis, friends and relatives have collectively pledged $3 million to secure the equivalent of a get-out-of-jail card for one of Florida's wealthiest healthcare operators, Philip Esformes, who has been detained since last month awaiting trial in a massive Medicare fraud case.

About 30 supporters have stepped up to help the Chicago transplant, who is being held in the Miami Federal Detention Center as he struggles to obtain a bond so he can move back into one of his side-by-side waterfront estates on exclusive North Bay Road in Miami Beach.

“The news of detainment and charges against [him] were both shocking and disheartening,” wrote Chicago Rabbi Avrohom Levin, head of a rabbinical college, who committed more than $2.2 million toward his bail. “Philip's name has always been synonymous with family and community.”

In another letter to a federal magistrate judge, Ormond Beach Rabbi Pinchas Ezagui, who pledged $232,000 toward Esformes’ bond proposal, praised him for financially helping his synagogue and school, insisting the businessman “is not a flight risk.”

But Magistrate Judge Edwin Torres has refused to budge on freeing the 47-year-old Esformes, who owns a chain of skilled-nursing and assisted-living facilities in Miami-Dade County — even under such a sizable bond.

Torres concluded that Esformes, charged last month in a $1 billion Medicare conspiracy, could flee the country.

More significant, the judge found that Esformes runs the risk of obstructing justice because he had plotted last year with two co-conspirators charged with Medicare fraud to help one of them leave Miami for Israel to avoid trial. Unbeknown to Esformes, the co-conspirators, Guillermo and Gabriel Delgado, accused of sharing Medicare patients with him in a kickback scheme, recorded a two-hour conversation with him. It was carried out as part of the brothers’ cooperation deal with the feds to plead guilty.

In a detention order, Torres noted that on the recording, Esformes “says quite plainly that, if he were [one of the Delgado brothers], he would flee or kill himself.” The judge also noted that Esformes recommended the “best places” to flee and that he would help take care of expenses.

Now, Esformes' defense attorneys, Michael Pasano and Marissel Descalzo, are pinning their hopes on an appeal to U.S. District Judge Joan Leonard, who was assigned his high-profile case and scheduled a bond hearing for Wednesday. They have not only pledged the same bond — or possibly more — but have suggested home confinement with former police officers standing guard around the clock, seven days a week, to call federal authorities about any suspicious activity. If bail were to be granted, Esformes, a father of three, would probably have to live in one of his two North Bay Road homes because he is going through a bitter divorce.

“Mr. Esformes has proposed an exhaustive list of conditions that essentially render his home confinement a private prison with limits on freedom of movement and communication tantamount to detention” at the Miami Federal Detention Center, his lawyers said in court papers filed this past week. Esformes has been detained since his arrest on July 22.

The lawyers assert the magistrate judge erred by basing his detention order on the “preexisting” obstruction of justice charges involving the Delgado brothers, rather than on any recent or post-indictment misconduct. They said “the government presented no evidence during the detention proceedings that the defendant posed a continuing risk of further obstructive behavior, much less a danger to the community.”

Esformes’ lawyers pointed out that other federal judges in South Florida have been able to fashion costly bonds that ensure the appearance of high-profile defendants at trial. They cited the $18 million bond for wealthy Palm Beach County doctor Salomon Melgen, who was charged last year with filing millions of dollars in false claims with Medicare for unnecessary eye surgery procedures. Melgen, who was considered a flight risk to his native Dominican Republic, secured the bond with his family’s assets but had to wait about four months to be released from detention.

Esformes’ assets, including bank accounts, real estate and and luxury cars, were frozen after the U.S. attorney’s office obtained a temporary restraining order upon his arrest. According to an indictment, he is accused of exploiting his network of about 20 Miami-Dade skilled-nursing and assisted-living facilities to fleece the taxpayer-funded Medicare program by filing false claims for services that were not necessary or in some instances not provided over the past 14 years.

An unidentified local hospital referred some of the thousands of Medicare patients to his network through kickback payments to physicians and other medical professionals, according to the indictment. The Miami Herald has learned that it is Larkin Community Hospital in South Miami.

Esformes is charged with conspiring with Arnaldo Carmouze, 56, a Palmetto Bay physician's assistant, and Odette Barcha, 49, a former director of outreach programs at Larkin. Torres, the magistrate judge, granted them bonds.

Esformes is also accused of referring his own network of patients to other convicted healthcare fraud offenders, including the Delgado brothers. They swindled Medicare for mental health, prescription drug and home healthcare services and ultimately helped federal investigators target the Miami Beach business executive.

According to the indictment, those kickbacks were “disguised” as payments for escort services for Esformes as well as related travel and hotel expenses.

Justice Department officials — along with South Florida's U.S. attorney, the FBI and Health and Human Services agents — described the Esformes prosecution as the nation's biggest Medicare fraud case.

Prosecutors said his healthcare network as well as other co-conspirators billed $1 billion for fraudulent medical services since 2009. In turn, Medicare paid Esformes' skilled-nursing and assisted-living facilities and the other operators about $500 million.