Florida long-term care business mogul Philip Esformes faces the possibility of decades in prison after being convicted Friday in the largest healthcare fraud scheme ever charged by the U.S. Justice Department.
A 12-person jury deliberated for four days last week before agreeing that the 50-year-old entrepreneur was guilty on 20 out of 26 charges. Those include paying and receiving kickbacks, money laundering and conspiracy to commit federal program bribery. Jurors did not, however, reach a verdict on the main count — that Esformes conspired to defraud Medicare.
Prosecutors blasted Esformes following the conclusion of the eight-week trial for the $1.3 billion scheme to defraud both Medicare and Medicaid, calling him a “despicable,” “vampire” who was fueled by “unbounded greed.”
“Even beyond the vital dollars lost … Esformes exploited and victimized patients by providing inadequate medical care and poor conditions in his nursing homes,” Shimon Richmond, special agent in charge of the U.S. Department of Health and Human Services Office of Inspector General’s Miami Regional Office, said in a statement. “We will continue the fight against such parasites.”
Sentencing has not been scheduled yet, but according to past reports, if convicted, Esformes could stand to face decades in prison.
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A North Shore rabbi has been ordered to pay $13 million in his ongoing legal battle over an alleged real estate Ponzi scheme that bilked investors out of more than $35 million.
Zvi Feiner, rabbi of an Orthodox Jewish Congregation in Skokie and head of the Feiner Investment Corporation, stands accused of using his status in the Jewish community to entice investment into nursing homes, which he would acquire and ultimately sell without paying back investors.
His alleged victims include a 90-year-old Holocaust survivor, a group of Jewish day school teachers that lost their life savings in the scheme, and a fellow Orthodox Jewish rabbi and businessman.
Rabbi Sidney Glenner invested more than $25 million in six loans to Feiner’s real estate companies between 2013 and 2015. The money was to be used to invest in nursing and retirement homes, with Feiner offering up as collateral his existing real estate holdings, according to court records.
At the same time Glenner made the loans, Feiner’s businesses began to falter. By 2014, a lien was placed on all of Feiner’s assets by a different investor, complicating Glenner’s investments and his efforts to be repaid.
When Glenner’s loan payments came due, Feiner said he could not pay due to “financial stress,” court documents show. Instead, he offered up various properties. But he already had sold some of the properties, and the value of the collateral is disputed by the two parties, according to court documents.
For example, Glenner in 2013 made a $3.8 million loan to Feiner for a nursing home investment in Downstate Decatur. The Decatur venture is also the subject of other lawsuits against Feiner, in which investors claimed the rabbi would make regular disbursements to investors before abruptly stopping.
Feiner told investors the nursing home’s operator was not paying rent and so he was forced to turn the property over to a lender. Local news reports, however, allege Feiner stopped paying the bills for the facility, causing its operator to close its doors. While the nursing home was open, Feiner borrowed from the facility and never paid it back, according to a previous lawsuit.
Eventually, the building that housed the nursing home was turned over to Glenner. The property was valued at $500,000, but Glenner had to pay $450,000 in unpaid real estate and payroll taxes, court records claim, leaving an the outstanding loan payment at $3.75 million.
In another case, Glenner loaned Feiner $7 million, and Feiner offered up four properties as collateral. When Feiner didn’t make payments on the loan, Glenner sought to take over the properties used as collateral — except Feiner had already sold two of them, according to court records.
In 2017, Glenner sought arbitration against Feiner in the Jewish Ecclesiastical Court of the Chicago Rabbinical Council. The court ordered Feiner to pay $13.2 million in the case. Now, lawyers for Glenner are asking the Cook County Circuit Court to confirm the Rabbinical Court’s ruling.
Feiner could not immediately be reached for comment.
This is at least the fourth lawsuit filed against Feiner involving his nursing home investment enterprise.
In November, the Cohen family of Chicago sued Feiner in federal court, saying he took more than $2 million in investments and never repaid them. One of those investments involves the Decatur nursing home. The family also invested in a South Holland retirement home that Feiner eventually sold for a profit of $3.6 million, which he did not share with investors, the suit alleges.
Earlier this year, a group of investors sued Feiner, saying they invested $15.5 million in his nursing home companies and were never repaid. In September 2017, a federal suit was filed against Feiner, with investors saying the rabbi’s failure to pay them for joint ventures he sold constituted a violation of the RICO Act.
When the new legislative session begins in Albany in January, State Senator Robert Ortt will be submitting two bills – and putting his support behind an already forwarded piece of legislation – that supporters say will hold owners of nursing more homes accountable for compliance violations.
Ortt, a Republican whose district covers the northern counties of Western New York, wants to create unscheduled inspections of nursing homes and under one of his two bills, 40 percent of those surprise visits would come outside regular business hours, including nights, weekends and even holidays.
Kelly Bentley, whose grandmother resides in a nursing home, speaks of some of the problems including injuries her loved one has suffered in her residence. Standing with her and listening at the podium is State Senator Robert Ortt, who is pushing for a series of bills in 2019 that he says will hold owners of non-compliant nursing homes more accountable.
Under the current rules, facilities are given advance warning of a pending visit which, Ortt points out, gives many the opportunity to make the adjustments which keep them in good graces while the inspectors are watching.
“Even myself, when I went to a facility, naturally we told them we were coming,” said Ortt, whose committee positions includes chairing the Senate’s Mental Health and Devrelopmental [sic] Disabilities Committee. “I was told after the visit – and I’ve gone through a couple – by residents and family members who called my office, and pleaded that I not tell anybody that they called… they said ‘what you saw yesterday was not how it normally is.'”
The second of Ortt’s pending submissions will prevent any owners of nursing homes found with violations to acquire more properties until they’re rectified, after which there would be a two-year probationary period after the issues are resolved.
Supporting Ortt’s legislation is Kelly Bentley, who chairs the Family Council of the Villages of Orleans Health and Rehabilitation Center. Her grandmother, Florence Moden, has suffered abuses in her nursing home, according to Bentley, most recently as early December. Despite the family’s complaints, she says, the problems have not been addressed.
“This is going to protect them,” she said. “This is our future, our fate. Im sorry, but we have to have some changes in Albany that are going to come back and ensure that we as family members, who have entrusted someone to care for our loved ones, that they’re actually going to receive that.”
He is also throwing his support behind a proposal submitted this past May by outgoing State Senator Kemp Hannon that gives the New York State Department of Health more powers to fine violators. It would also require utilizing independent quality monitors, approved by the DOH, to directly supervise homes found to be non-compliant to ensure violations are addressed and fixed.
“Right now, there’s a nursing home that’s failing. They have to come up with a corrective action plan. Who makes sure that they do that?” Ortt asked. “Right now, I guess really the answer is we don’t know. We hope that they comply. If they don’t, maybe we get a complaint or call, but there’s no one on site to hold the feet to the fire of the facility.”
Hannon, the original sponsor of the bill which includes independent quality monitors, was defeated in the November elections and will leave office after nearly three decades. Ortt, who is certain to lose his chair position in the Mental Health and Developmental Disabilities Committee when Democrats assume the majority in January, acknowledged the challenge of forwarding his bills under new leadership.
He’s hopeful, though, that his legislation will gain the support needed to be forwarded to Andrew Cuomo’s desk later in 2019.
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The Ohio Health Care Association is urging the Ohio Supreme Court to reconsider a decision seen by some as relief for surviving spouses in the state facing bills for the care of deceased loved ones.
On Dec. 12, the state’s high court ruled 5-2 that Embassy Healthcare should have filed a claim with the estate of a Warren County widow’s husband before pursuing payment from her for his care under Ohio’s “necessaries” statute.
The decision reversed an appeals court ruling favoring the health-care provider.
Advocates for seniors said the ruling would have far-reaching implications for surviving spouses facing bills for the care of loved ones who have died.
In urging reconsideration, a lawyer representing the owner of the nursing home, Carlisle Manor in Warren County, questioned the implications of the ruling for other senior health-care providers.
“Must they follow this case and engage in the futile act (as the dissent rightly notes) of opening an estate (likely naming the creditor as administrator), present the claim to the administrator, and have that claim denied by the self-same creditor for insufficient assets?” Susan Audey, the lawyer filing for Embassy Healthcare, asked in a motion to reconsider and clarify the decision.
“The unintended consequence to loved ones of requiring this expedited inquiry so soon after the death to preserve a creditor’s claims appears harsh, stressful, and unfair to the bereaved survivors,” Audey added in her Dec. 21 motion for reconsideration and clarification.
On Christmas Eve, the health care association, representing 1,000 nursing homes, assisted living center and service providers, filed the brief in support of the motion.
“The Court’s decision creates an ambiguity that will lead to further confusion,” lawyer David Brown said.
The case stems from a lawsuit originally filed by Embassy, the nursing-home owner, against widow Cora Sue Bell in Franklin Municipal Court over bills owed for care of her husband, Robert, who had died.
In filings urging the state’s high court to rethink their decision and its implications, Brown and Audey point to a 1990 ruling.
In 1990, in Ohio State University Hospital v. Kinkaid, the court “found no such requirement in a case where a health care provider-creditor, not unlike Embassy Healthcare here, sought payment for unpaid medical-care necessaries from a spouse after the decedent’s death and after the time for presenting claims to an estate expired,” Audey said in her motion.
Bell’s lawyer and those who filed briefs in support of her Ohio Supreme Court appeal have until Monday to argue against reconsideration.
A lawyer with one of the groups backing Bell’s case, the Legal Aid Society of Columbus, said he wasn’t surprised.
“Anytime a corporation loses at the Supreme Court level, it’s probably not a bad idea to file for reconsideration,” Scott Turguson said. “There’s a lot of money involved.”
Turguson was unsure if he or others who supported the appeal by Pro Seniors, a senior advocacy group in Cincinnati, would file responses.
He expressed confidence that the decision would stand, while pointing out two new Supreme Court justices would be joining the court in January.
I think it’s very unlikely. Anything’s possible,” Turguson said.
Miriam Sheline, the lawyer behind the successful high-court appeal, said the arguments in the latest motion were nothing new and predict the ruling will stand.
December 28, 2018 06:25 PM
Following a year-long News10NBC investigation into the horrific conditions some were living in while being patients at Sodus Rehabilitation and Nursing Center, there’s a new push to change state law to help keep people in nursing homes safe.
News10NBC has been exposing the care and conditions inside Sodus Rehabilitation and Nursing Center after more than a dozen patients and family members stepped forward with horror stories about the physical conditions, food, cleanliness and lack of staffing inside.
Some of the more egregious accounts come from those who were rehabilitation patients and nearly lost limbs, they say, because of inadequate medical care.
The CEO of the company that owns Sodus Rehabilitation and Nursing Center refused to answer any of News10NBC Investigative Reporter Jennifer Lewke’s questions when she tracked him down at one of his downstate nursing homes.
He asked her to leave the property and then called the police.
Lewke also went to Albany to find the Commissioner of the New York State Department of Health, Dr. Howard Zucker.
Dr. Zucker’s department is tasked with regularly inspecting nursing homes. “I’ve seen your reports and I’ve been following what you’re doing and our entire team has been on this issue,” he told News10NBC.
But Senator Robert Ortt of Lockport doesn’t think that’s good enough.
“In many cases, these people have nowhere else to go. This is their only spot, their only opportunity and so no matter how bad the service, no matter how terrible the care, they still stay there and the owner still gets paid,” Ortt said at a press conferencing announcing new legislation to strengthen protections.
Ortt’s set of bills would require independent quality monitors to enforce compliance with corrective plans when problems are identified. He also wants at least 40 percent of nursing home inspections to be conducted on nights, weekends and holidays.
Ortt’s legislation, if approved, would also prevent current nursing home owners from buying new facilities while their current properties are facing violations and/or compliance issues.
“Look, I’m all for making money but if you’re going to buy a nursing home and you’re going into that business, you’re going to make money the right way. You’re not going to make it on the backs of our loved ones, on the backs of our seniors with providing them terrible, terrible care,” Ortt added.