The U.S. Department of Justice (DOJ) is bringing criminal charges in a Florida federal court against three men accused of defrauding Medicare and Medicaid in a $1 billion scheme involving kickbacks and exploitation of drug-addicted patients. The indictments represent the largest criminal health fraud case ever brought against individuals by the federal government. Charges include payment of kickbacks, obstruction of justice, money laundering and wire fraud. It was not immediately clear how much of the $1 billion in allegedly false billing was actually paid out, although an indictment says that Medicare paid out at least $464 million in improper reimbursement.
The indictments targeted Miami-area residents Philip Esformes, Odette Barcha and Arnaldo Carmouze. Esformes, who could face life imprisonment if convicted, was allegedly the ringleader, operating a network of 30 nursing homes and assisted-living centers where medically unnecessary services were routinely supplied. Leslie R. Caldwell, Assistant Attorney General at the DOJ, said:
Among the thousands of people cycled through the fraudulent network were … drug addicts who were allegedly prescribed opioids … in order to entice them to stay in facilities where they didn’t belong.
The DOJ is alleging an array of misconduct. It includes paying kickbacks to attract patient referrals and receiving kickbacks in exchange for steering patients to other health care providers. The kickbacks were sometimes disguised as charitable donations, payments to female escorts and payments to a basketball coach for Esformes’ son, according to an indictment.
Esformes in 2006 was part of a $15 million civil settlement involving allegedly fraudulent conduct that was virtually identical. Prosecutors that he simply retooled the scheme. Specifically, the trio in the recent charges used “sophisticated money laundering techniques” to conceal the scheme and Esformes’ identity. Government agents eventually uncovered the fraud through data analysis that revealed outsize billing and links between providers that were not obviously connected to one another. Barcha was a hospital director and Carmouze was a physician’s assistant. They were charged with the payment of bribes for referrals among other things.
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