On Friday, January 22, 2021 New York Times headline, “In the End, Trump Undid Years of Prosecutions.”  Prosecuting people for fraud is tough, because the criminals are often  millionaires, and can hire the best defense lawyers in the country.    In a similar story, they called it a kick in the teeth for prosecutors.  

One pardon went to Philip Esformes, a former nursing home executive who orchestrated one of the biggest Medicare frauds in the United States. He served four years of a 20 year sentence and was commuted by Trump.   Esformes criminal activities were summarized by Wikipedia:

In April 2019, Federal officials charged Philip Esformes of paying and receiving kickbacks and bribes in the largest Medicare fraud case in U.S. history. The largest case of fraud brought to the Department of Justice took place between 2007 until 2016. Philip Esformes, 48, owner of more than 20 assisted living facilities and skilled nursing homes was the leader of the ring. Former Director of the Outreach Program at Larkin Hospital in South Miami, Odette Barcha, 50, was Esformes’ accomplice along with Arnaldo Carmouze, 57, a physical assistant in the Palmetto Bay Area.

These three constructed a team of corrupt physicians, hospitals, and private practices in South Florida. The scheme worked as follows: bribes and kickbacks where paid to physicians, hospitals, and practices to refer patients to the facilities owned and controlled by Esformes. The assisted living and skilled nursing facilities would admit the patients and bill Medicare and Medicaid for unnecessary, fabricated and sometimes harmful procedures. In addition to that, some of the charges to Medicare and Medicaid include prescription narcotics prescribed to patients addicted to opioids to entice the patients to stay at the facility in order for the bill to increase. Another technique used by the dream team was to move patients in and out of facilities when the patients have reached the maximum number of days allowed by Medicare and Medicaid. This was accomplished by using one of the corrupt physicians to see the patients and coordinate for readmission in the same or a different facility owned by Esformes. Per Medicare and Medicaid guidelines, a patient is allowed 100 days at a skilled nursing facility after a hospital stay. The patient is given an additional 100 days if the he/she spends 6 days outside of a facility or is readmitted to a hospital for 3 additional days.

The facilities not only fabricated medical documents to show treatment was done to a patient, they also hiked up the prices to equipment and medications that were never consumed or used. The role of Barcha as the Director of the Outreach program was to expand the group of corrupt physicians and practices. She would advise the community physicians and hospitals to refer patients to the facilities owned by Esformes and they will receive monetary gifts. The group would refer patient to the facilities and receive kickbacks. The law against kickbacks is called the Anti-Kickback Statute or Stark Law. This law makes it illegal for medical providers to refer patient to a facility owned by the physician or a family member for services billable to Medicare and Medicaid. It also prohibits providers to receive bribes for patient referrals. The involvement of Carmouze in the grand scheme was to prescribe unnecessary prescription drug to patients who may or may not have needed the medications. He also facilitated community physicians to visit the patient in the assisted living facilities owned by Esformes in order for the physician to bill Medicare and Medicaid and Esformes received kickbacks. Carmouze also assisted in falsifying medical documentation to represent proof of medical necessity for many of the medications, procedures, visits, and equipment charged to the government.

Esformes has been detained since 2016. In 2019, he was convicted for charges that add up to 20 years in prison. His sentence was commuted by Donald Trump on December 22, 2020.

As reported, “Just days after being granted clemency by President Donald J. Trump and released after serving four years of his 20-year sentence, Mr. Esformes was under a disco ball celebrating his daughter’s wedding.”   Oddete Barcha  pleaded guilty, and got only 15 months.  Kind of makes you sick, to think of the nursing home patients being used as pons, and getting them addicted to opioids so they would stay longer at the facility. 

Why in the world would Philip Esformes qualify for a Trump pardon?  Donald Trump pardon his friends, like Manafort, Gates and Flynn, convicted of  lying to the FBI, tax fraud, money laundering (Manafort and Gates), and bank fraud (Manafort).   Esformes crimes had real victims,  elderly people in nursing homes in South Florida.  Philip Esformes was in the process of challenging his conviction through the appellate court. A friends of the court brief (Amicus curiae) was filed,  arguing that the charges should be dismissed because prosecutors unjustifiably seized hundreds of privileged materials, allowed prosecutors and case agents to review and use privileged materials for months.   Those supporting the  brief  included heavy hitters such as Ken Starr,  and former Attorney Generals Alberto Gonzales and John Ashcroft.  

But what I believe won the Trump’s heart was that Esformes cohorts in the Medicare rip off business , Gabriel and Guillermo Delgado turned on Philip Esformes and for the brothers’  help with authorities, got lighter sentences.   You can see the parallels between Michael Cohen helping prosecutors in New York and the Delgado brothers helping South Florida prosecutors.   I liked this comment in the Miami-Herald:

“Bruce Udolf, a former federal corruption prosecutor and prominent defense attorney in South Florida, said that Trump’s rationale for his clemency decisions may be based on “criminal justice reform.” But Udolf said the president’s pardons and commutations were really about taking care of “moneyed and privileged” political cronies and white-collar criminals — including Trump’s former advisers Stephen Bannon, Paul Manafort and Roger Stone — rather than “more deserving people languishing in prison” with draconian sentences for drug offenses.”

Prosecutors may decide to try Esformes again, on charges that the jury in the first trial could not decide on.  (See Miami-Herald story) 

Another pardon went to Judith Negron who stole hundreds of millions of dollars in fraudulent Medicare payments. She was sentenced to 35 years, but her sentence was commuted after serving 8 years. She was relieved of any remaining obligation to pay her share of the 87 million in restitution.

I’ll stop here.  There is still a lot to unpack in all these pardons. 

Links:

For Prosecutors, Trump’s Clemency Decisions Were a ‘Kick in the Teeth’

Miami Herald: Trump’s clemency freed Esformes, but he still faces pending Medicare fraud charges

Amicus curiae on the Esformes appeal