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For more than six years, Goldberg Kohn represented whistleblower Maureen Nehls, a former Total Pharmacy employee, in a lawsuit claiming that pharmaceutical giant Omnicare Inc. paid Philip Esformes and his father a kickback by significantly inflating the price Omnicare paid in 2004 for Total Pharmacy, which was partially owned by Philip Esformes. In June 2013, Omnicare agreed to pay $17.2 million to the government to settle its part of the ongoing lawsuit.
Now federal authorities are applying extraordinary court pressure to keep Philip Esformes locked in a Florida detention cell where he awaits trial for allegedly orchestrating an unprecedented $1 billion Medicaid and Medicare bribery and kickback scheme.
"This is the largest single criminal health care fraud case ever brought against individuals by the Department of Justice," Assistant Attorney General Leslie Caldwell said at a July 22, 2016, news conference announcing the charges.
Arrested at one of his $2 million estates on the Miami Beach waterfront that morning in July, and placed in immediate detention, Esformes has been denied bond despite a barrage of court pleas that include letters of support from nursing home patients and the recipients of his philanthropy. This brings forth a new challenge for a business family that has withstood two decades of Justice Department probes and Chicago Tribune investigations into allegations of patient abuse, corruption and substandard conditions at their Illinois, Florida and Missouri nursing home facilities.
From their Lincolnwood offices, Esformes and his father and business partner, Morris Esformes, took in millions of dollars annually from federal programs for the sick and disabled.
Both have cultivated reputations as prominent philanthropists, having given millions of dollars to synagogues, schools and medical facilities in the United States and Israel. The Esformeses sold their Illinois nursing facilities about four years ago but kept their headquarters in the Chicago suburbs as they continued to operate 20 or so homes in Florida.
The new federal indictment alleges that Philip Esformes and a handful of Miami co-conspirators bilked Medicaid and Medicare for 14 years by cycling some 14,000 patients through various Esformes facilities, where many received unnecessary or even harmful treatments. In recent court filings, prosecutors have gone beyond the allegations of the indictment to reveal new claims of patient harm and corruption. And when authorities raided one Esformes nursing facility on the day of his arrest, a resident approached the agents and said she had been “punched in the stomach when she made a complaint about the poor services rendered at the facility.”
Esformes faces a potential life sentence if convicted on charges of fraud, conspiracy and obstruction of justice. He has strenuously protested his innocence, arguing that nonstop labor and uncompromising honesty account for his reported $78 million in personal assets — with no debts or liabilities.
Morris Esformes, Philip's father and business partner, has not been charged in the case.
Separate from the pending federal indictment, the Chicago Tribune found that families have filed 20 wrongful death lawsuits since 2013 against seven of Esformes' facilities in Miami-Dade County. Four were on Florida's watch list of troubled facilities — among a total of only 11 nursing facilities in that area.