Three Individuals Charged in $1 Billion Medicare Fraud and Money Laundering Scheme

Department of Justice

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FOR IMMEDIATE RELEASE

Friday, July 22, 2016

Three Individuals Charged in $1 Billion Medicare Fraud and Money Laundering Scheme

The owner of more than 30 Miami-area skilled nursing and assisted living facilities, a hospital administrator and a physician’s assistant were charged with conspiracy, obstruction, money laundering and health care fraud in connection with a $1 billion scheme involving numerous Miami-based health care providers.
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Philip Esformes, 47, Odette Barcha, 49, and Arnaldo Carmouze, 56, all of Miami-Dade County, Florida, were each charged in an indictment unsealed today. According to the indictment, Esformes operated a network of over 30 skilled nursing homes and assisted living facilities (the Esformes Network), which gave him access to thousands of Medicare and Medicaid beneficiaries. Many of these beneficiaries did not qualify for skilled nursing home care or for placement in an assisted living facility; however, Esformes and his co-conspirators nevertheless admitted them to Esformes Network facilities where the beneficiaries received medically unnecessary services that were billed to Medicare and Medicaid. Esformes and his co-conspirators are also alleged to have further enriched themselves by receiving kickbacks in order to steer these beneficiaries to other health care providers – including community mental health centers and home health care providers – who also performed medically unnecessary treatments that were billed to Medicare and Medicaid. In order to hide the kickbacks from law enforcement, these kickbacks were often paid in cash, or were disguised as payments to charitable donations, payments for services and sham lease payments, court documents allege.

Esformes and Barcha were also charged with obstructing justice. According to the indictment, following the 2014 arrest of co-conspirators Guillermo and Gabriel Delgado, Esformes attempted to fund Guillermo Delgado’s flight from the United States to avoid trial in Miami. The indictment further alleges that Barcha created sham medical director contracts following receipt of a grand jury subpoena in June 20, 2016, in order to conceal and disguise the payment of kickbacks she made in exchange for patient referrals for admission to Esformes Network facilities and another Miami-area hospital.

According to court documents, in 2006, Esformes paid $15.4 million to resolve civil federal health care fraud claims for essentially identical conduct, namely unnecessarily admitting patients from his assisted living facilities into a Miami-area hospital. However, Esformes and his co-conspirators allegedly continued this criminal activity-adapting their scheme to prevent detection and continue their fraud after the civil settlement. The indictment alleges that the co-conspirators accomplished this by employing sophisticated money laundering techniques in order to hide the scheme and Esformes’ identify from investigators. The FBI and HHS-OIG ultimately employed advanced data analysis and forensic accounting techniques and were able to identify the full scope of the fraud scheme.
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