$1B Medicare fraud scheme brings charges for 3 in Florida

In what the U.S. Department of Justice (DOJ) calls its largest single criminal healthcare fraud case, three people have been arrested and charged with running a $1 billion Medicare fraud and money laundering scheme involving multiple providers based in and around Miami.

The three facing charges are the ringleader of the alleged conspiracy, Phillip Esformes, owner of more than 30 nursing and assisted-living facilities in the Miami area, along with Odette Barcha, administrator at the Floridian Gardens Assisted Living Facility, and physician assistant Arnaldo Camouze.

According to the indictment, between 2002 and 2016, Esformes used his network of nursing homes, and the access it provided to Medicare beneficiaries, to admit people who wouldn’t qualify for assisted-living facility placement or skilled nursing care and then bill Medicare for medically unnecessary services,

Leslie Caldwell, assistant attorney general in the DOJ’s criminal division, said other conspirators would pay bribes or kickbacks to get patients admitted to facilities Esformes owned.

“As alleged in the charging documents, the conspirators were ruthlessly efficient,” Caldwell said. “When a patient reached Medicare-imposed length of stay limits at one facility, the conspirators, through their network of corrupt health care providers, are alleged to have paid and received bribes and kickbacks as they arranged to have patients moved into, out of, and between different facilities, all the while running up the taxpayer’s tab as they billed Medicare for fraudulent, unnecessary and sometimes fabricated treatment.”

Caldwell said patients were harmed in the process, alleging one of the ways the scheme kept patients in facilities longer was to give opioid painkillers to known drug addicts.

The DOJ said Esformes’ conduct hadn’t been a secret, as court documents show in 2006, he paid $15.4 million to resolve civil claims for the same sort of scheme he’s being accused of now, unnecessarily admitting patients from his facilities to a hospital. The indictment alleged Esformes continued committing fraud after the settlement by “sophisticated money laundering techniques in order to hide the scheme and Esformes’ identify from investigators.”

Caldwell and others noted that while this is the largest single criminal Medicare fraud case brought by the DOJ, it’s far from the only such scheme in South Florida. Caldwell called the area “ground zero” for Medicare fraud, and the Miami Herald called the city “the country’s capital for healthcare corruption.” When the DOJ charged 301 people nationwide in a Medicare fraud sweep in June, nearly one-third of those defendants were from Florida’s Southern District.