Pharmed founders charged with fraud

Posted on Tue, Jul. 22, 2008
Pharmed founders charged with fraud
By JOHN DORSCHNER



Carlos and Jorge de Céspedes, founders of Pharmed, once one of the largest Hispanic owned businesses in the country, were charged Tuesday with healthcare-related wire fraud and income tax evasion in federal court.
They face up to 25 years in prison.

Federal prosecutors filed the charges in an information, which is usually an indication that the defendants are willing to cooperate and plead guilty, but the U.S. attorney's office refused to say whether that applied in this case.

~snip~
The brothers were not immediately available for comment, but earlier this year, they vehemently denied the allegations of an HCA hospital chain attorney that the kickback ''scheme'' went ''all the way to the top'' of the Pharmed organization, according to a court transcript.

~snip~
Sons of a Havana dental surgeon, Carlos was 11 and Jorge 8 when they arrived in Miami in 1961 as part of the Pedro Pan exodus, in which 14,000 children were sent out of Cuba by parents who feared the Communist government was about to send the children to camps for indoctrination.

More:
http://www.miamiherald.com/news/breaking-news/v-print/story/613611.html

S. Fla. businessmen brothers De Cespedes charged with fraud
By Vanessa Blum | South Florida Sun-Sentinel
9:34 PM EDT, July 22, 2008

Two brothers who built a South Florida medical supply firm into one of the country's largest Hispanic-owned businesses cheated a Miami-Dade County hospital out of roughly $5 million and failed to pay taxes on more than $20 million of income, federal prosecutors claim.

The U.S. Attorney's Office announced the fraud and tax evasion charges Tuesday against Carlos de Cespedes, 58, and Jorge de Cespedes, 55, co-owners of Pharmed Group Corp.

The brothers, prominent members of South Florida's Cuban-American and business communities, appeared before a federal magistrate in Miami and were released on $250,000 bond.

If convicted, both men could be sentenced to more than five years in prison and required to pay more than $15 million in back taxes, interest and fines.

"These individuals had it all — success, money, and the admiration of their community," U.S. Attorney Alex Acosta said. "But they have tarnished their good names and reputations because they wanted even more than they already had, and they wanted it the quick and easy way."

Jorge de Cespedes and his wife, Yvonne, own a home in Southwest Ranches valued at $1.7 million and a $450,000 Hollywood oceanfront condominium. Carlos de Cespedes and his wife, Martha, live in a waterfront home in Coconut Grove valued at $2.4 million. Neither man's spouse has been charged with any wrongdoing.

More:
http://www.sun-sentinel.com/business/sfl-flbfraud0723sbjul23,0,6222630.story

Pharmed: A time line
Posted on Wed, Jul. 23, 2008

1961 -- Sons of a Havana dental surgeon, Carlos de Céspedes, 11, and Jorge, 8, arrive in Miami as part of the Pedro Pan exodus.

1980 -- The brothers start Pharmed.

1987 -- Wyeth Pharmaceuticals sues the de Céspedes brothers and others over allegations they improperly obtained drug discounts. Case settled out of court nine years later in a confidential agreement.

1999 -- AmerisourceBergen sues Pharmed, accusing the company of setting up a corporation to get improper price breaks. Case settled out of court.

2004 -- Roche Healthcare, the company's largest supplier, abruptly stopped using Pharmed, resulting in a $300 million reduction in annual revenue.

2005 -- Johnson & Johnson ends its 25-year relationship with Pharmed, accusing the company of ''unjust enrichment'' in collecting $22 million in rebates to which they were not entitled.

2006 -- Commissioner Pepe Diaz co-sponsors ordinance requiring Jackson Memorial Hospital to give preference to local suppliers, a category that includes Pharmed. For the four previous years, he received at least $475,000 in salaries, loans and bonuses from companies controlled by the brothers. Diaz and the brothers deny any impropriety.

June 2007 -- HCA hospital chain sues seven people, including a Pharmed executive, but not the company or the brothers, alleging the executive paid kickbacks to two hospital employees who then ordered supplies from Pharmed that were never delivered. HCA paid Pharmed $3.5 million for the supplies, the lawsuit states.

October -- Pharmed declares bankruptcy.

June -- Florida International University announces it's changing the name of the basketball arena from Pharmed Arena to FIU Arena.

June -- Three hospital workers are named in a criminal information involving an alleged HCA kickback scheme. Attorneys for the three indicate their clients are cooperating with prosecutors.

July 22 -- Carlos and Jorge de Céspedes charged with healthcare-related wire fraud and income tax evasion and both could face 25 years in prison.

http://www.miamiherald.com/1060/story/614310.html

Quick! Someone call Gloria Estefan! Call Andy Garcia! Call out Lincoln Diaz-Balart, Ileana Ros-Lehtinen, and hey, throw in Mel Martinez, just like the old days when they came to help Little Havana attempt to steal Elián!
Is Joe Cubas, the man who seduced Cuban baseball players, then ripped them off when he got them to the States, and got banned from baseball himself available?



Don't worry, de Céspedes brothers. Help is on the way!
These guys LOVE to help people.

owned by Senator Bill Frist, and Governor Mitt Romney. Way to go, porkers!

Diaz bonus tied to fraud case
Miami-Dade Commissioner Jose 'Pepe' Diaz was paid by a company that prosecutors say was linked to a major healthcare fraud.
Posted on Thu, Jul. 24, 2008

BY JOHN DORSCHNER
jdorschner@MiamiHerald.com
Pharmed owners face fraud charge

Miami-Dade Commissioner Jose ''Pepe'' Diaz received $20,000 in 2004 from what federal prosecutors describe as a shell company used to conceal fraudulent proceeds from a hospital kickback scheme -- a payment the commissioner says was a legitimate bonus.

~snip~
Diaz's connection with the de Céspedes brothers is well known. Shortly after his election to the County Commission, he was hired by Astri Group. Between 2002 and 2006 Diaz received at least $475,000 in salaries, loans and bonuses from companies controlled by the brothers, The Miami Herald reported.

In 2006, at a time when Pharmed had serious financial problems, Diaz co-sponsored an ordinance requiring Jackson Memorial Hospital to give preference to local suppliers, a category that included Pharmed. Diaz and the brothers insisted there was no impropriety.

For decades, the de Céspedes brothers have been widely respected South Florida businessmen, but Tuesday's charges on healthcare fraud and tax evasion outline a scheme in which the brothers bilked Kendall Regional Medical Center out of several million dollars in a kickback scheme that involved Kaufman Medical Products.

The information filed by prosecutors alleged that the brothers conspired with three employees of Kendall Regional Medical Center and others to get the hospital to pay Pharmed millions of dollars for supplies that were never delivered.

More:
http://www.miamiherald.com/top_stories/story/615837.html