Feds Get Mixed Results In Esformes Forfeiture Bid

By Nathan Hale

Law360, Miami (April 9, 2019, 8:28 PM EDT) — A federal jury found Tuesday that nursing home mogul Philip Esformes should forfeit his interests in the operating companies for seven Miami-area facilities after his conviction for money laundering, but didn’t give the government most of the assets it sought.

“Definitely, we did far better than we thought we would based on the counts of conviction,” Black told Law360.

The jury’s ruling in this second phase of the case continued a streak of mixed results for the government, despite prosecutors securing a significant conviction overall. The jury found Esformes, 50, guilty Friday on 20 counts of paying and receiving kickbacks, money laundering, bribery, and obstruction of justice at the end of a two-month criminal trial, but the convictions lacked any substantive health care fraud charges, even after the government consistently billed the case as the largest health care fraud case in history.

“The government has been advertising this as a billion-dollar fraud for three to four years. They have wildly overstated their case time and time again,” Black said Tuesday. “And now, with the forfeiture, the jury didn’t give them a dime, not a single bank account, none of the assets.”

The government sought forfeiture of a long list of assets it said could be tied to Esformes’ money laundering conspiracy, including his interests in operating and property companies for 16 assisted living facilities and skilled nursing facilities referenced in the case; four pieces of real estate property, including his Miami Beach home; 19 bank accounts; a $360,000 Greubel Forsey watch he owned; and a $52,800 Hermes Birkin bag owned by his wife.

During closing arguments in the forfeiture trial Monday, Black had even conceded that three of the bank accounts should probably be forfeited. He said after the Tuesday ruling that he thinks one issue with the bank accounts was that the court had told the jury it had to decide on a specific amount of money that was in each account at the time of the crime, which made reaching a unanimous agreement more difficult.

“I think they couldn’t agree on an amount of money with any of those accounts,” he said.

Ultimately, the jury unanimously found that a sufficient nexus existed between the eight money laundering counts on which it found Esformes guilty and the operating companies for the skilled nursing facilities Oceanside Extended Care Center, North Dade Nursing and Rehabilitation Center, Harmony Health Center, Fair Havens Center and The Nursing Center at Mercy, plus the assisted living facilities Eden Gardens and Flamingo Park, Manor.

The value of Esformes’ interests in those facilities’ operating licenses was not immediately available Tuesday, and a spokeswoman for the U.S. Department of Justice did not immediately respond to a request for comment.

The government accused Esformes in the case of fraudulently receiving $450 million from Medicare and Medicaid through his South Florida network of facilities for services that were provided because of bribes, were not needed or were never provided. It said he personally pocketed more than $38 million through a network of 256 bank accounts.

Prosecutors said he made payments to doctors to send patients to his facilities, to state health agency officials to get inspection schedules and complaint reports, and to former University of Pennsylvania men’s basketball coach Jerome Allen to get his son a spot on the school’s basketball team and admission into its Wharton School of Business.

Esformes, whom the court found to be a flight risk, has been in custody since his arrest in July 2016. He will likely receive a lengthy prison term at his sentencing, which the court tentatively set for June 6-7.

The government is represented by Daren Grove and Nalina Sombuntham of the U.S. Attorney’s Office for the Southern District of Florida, and James V. Hayes, Elizabeth Young, and Allan Medina of the U.S. Department of Justice’s Criminal Division.

Esformes is represented by Howard M. Srebnick, Roy Black, Jacqueline Perczek and Rossana Arteaga-Gomez of Black Srebnick Kornspan & Stumpf PA, Marissel Descalzo of Tache Bronis Christianson & Descalzo PA, and Bradley Horenstein of The Horenstein Firm PA.

The case is U.S. v. Esformes et al., case number 1:16-cr-20549, in the U.S. District Court for the Southern District of Florida.

–Additional reporting by Carolina Bolado. Editing by Haylee Pearl.