Esformes Must Forfeit Interests in Long-Term Care Companies, if Only Others Would Follow

Esformes must forfeit interest in long-term care operating companies, judge rules

Philip Esformes, the Florida assisted living and skilled nursing facility owner found guilty in April of more than 20 charges in a case that the federal government described as “the largest single criminal healthcare fraud case ever brought against individuals by the Department of Justice,” must forfeit his interest in seven operating companies related to his facilities, a federal court has ruled.

The decision, issued July 1 in the U.S. District Court for the Southern District of Florida, was a denial of Esformes’ motion asking the court to acquit a jury’s verdict that the assets were forfeitable. The judge’s order applies to Esformes’ interest in the operating companies for the following assisted living or skilled nursing properties: Eden Gardens in Miami, Fair Havens Center in Miami Springs, Flamingo Park Manor in Hialeah, Harmony Health Center in Kendall, North Dade Nursing and Rehabilitation Center in North Miami, Nursing Center at Mercy in Miami and the now-closed Oceanside Extended Care Center in Miami Beach.

“Esformes’s operating companies gave his business a facade of legitimacy as he used them to hold bank accounts and operate the various SNFs and ALFs engaged in the elaborate money laundering and kickback scheme,” U.S. District Judge Robert N. Scola Hr, wrote. “Accordingly, the Court finds that there is sufficient evidence to ‘permit a reasonable jury to conclude that the Government has proven, by a preponderance of the evidence, that the property is subject to forfeiture.’ ”

Scola also denied Esformes’ motions seeking acquittal and a new trial.

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The Magic of Platinum Partners and the Wand of the Magicians Involved – and the Great Tragedy to Jews Everywhere

Great liars are also great magicians.

Adolf Hitler

[Opinion 6.24.19]

Platinum Partners’ Feats of Magic and the Potential for a Great Escape –

The Existential Threat to All of Judaism

The anti-Semitism of Eastern Europe in the mid-1900’s was perpetuated by fear. The prominent Jewish families of Eastern Europe were financiers, bankers, jewelers, clothiers and well-known figures in art and antiquities collection. In whatever form of religious observance our family members took, they were feared because of their successes not because of their improprieties. Hitler’s hold on his own supporters was dominated in large part by a culture of fear shared by Bavaria and surrounding German areas, of the possibility of losing their German Arian identity to Jews, who did not inspire trust, not because they were untrustworthy but because they were gloriously successful at everything they did. Our family members were accomplished.  There were very few who exchanged education for Talmud even in the most religious families of the time. Rather for many families, mastery of life encompassed an aptitude at religious and non-religious subjects and a strong mentality of self-sufficiency. And, the Jewish identity of perseverance and tenaciousness inspired unfounded mistrust, xenophobia and anti-Semitism. As such, Hitler gained power and Jews were slaughtered.

Fast-forward fifty, sixty, seventy years and the world is seeing an increase in anti-Semitism. Unlike in the past, however, it is not a blind mistrust, it is one based upon what feels almost like a culture of fraud and deceit ingrained in so much of the Jewish Zeitgeist that it is tainting all Jews. It can almost be said that the mistrust is justified, based in Ponzi Schemes, privatized, inadequate education to the detriment of non-Jews and secular Jews and an uncanny ability to circumvent laws. Everything from vaccines and education to financial accountability and governmental regulations, are not outside the scope of subject the pubic Jewish collective is trying to manipulate.

Those of us willing to call out wrongs are relegated to courtrooms and lawsuits with no end in site. As such, anti-Semitism is far more difficult to counter than it was in the times immediately preceding Hitler’s power and during the war. And if our Jewish brothers are not held to account, Jews everywhere will be castaway as pariahs.

The Platinum Partners Ponzi Scheme, the Madoff Ponzi Scheme, the Philip Esformes conviction are so deeply rooted in the Jewish run ethos, they are leaving far more than financial ruin in their wake. They are increasing the breadth of a community of people who hate Jews because we are viewed in the unfavorable light these Jewish fraudsters shine on our community. That these frauds are perpetrated with such grace and ease by members of the Jewish community is a travesty.  That the moral compass of the community supporting them is so skewed it is unwilling to even acknowledge that the acts of Platinum’s Partners’ partners were calculated, orchestrated and choreographed like any great magic show.

And if Platinum Partners’ partners do not get convicted, the result could be catastrophic for Jews everywhere. If we are incapable of bringing swift and harsh justice against those Jews who commit wrongs, we will all suffer the consequences. That fraud is with increasing frequency seeping into the “Jewish identity” and is damaging that identity for everyone. The Platinum Partners case is a blight on our community and it should be viewed as such, whispered like the big C-Word (cancer) when our parents talked at the Shabbos table about a friend diagnosed days before. Jewish orchestrated fraud is a cancer, a blight, a disease of the worst form and if not stopped, it will spread. This is not anti-Semitic but an honest view of the dangers that rampant fraud within our community creates.

The Magic of the Platinum Partners’ Ponzi Scheme was the ease with which it was orchestrated, the complexity of the scheme and the corresponding complications involved in painting a clear picture for a jury such that the jurors can convict. The case was and continues to be simply too chaotic, too scattered, too unintelligible and we opine that this is by design, a master creation by a brilliant defense team.

If the Judge does not rule a mistrial, we believe there is a significant likelihood that this jury will come back without the clarity necessary to convict. Like the crimes themselves, a mistrial or a failure to convict will be deeply unjust for those defrauded, for future victims, for public trust and most importantly, for Jews everywhere and the world’s perception of us. We will once again be viewed as having a magical ability to escape unscathed.

It is very likely that when the Defendants sat with their team of lawyers, negotiated their joint defense agreements, and strategized, it was clear that the first thing they needed to manipulate was the jury. They did not trust their fates to fellow Jews, a jury of their peers, but to the diametric opposite, a mostly African America pool of jurors likely inexperienced in the private equity investment world.

Mark Nordlicht, David Levy and Joseph SanFilippo are smart, savvy and well-educated. They are the epitome of privilege and money. Nordlicht comes from a polished, Jewish, observant Yeshiva-related upbringing. Levy is much the same. These are not men who have ever had to live from paycheck to paycheck. These are not men who have experienced racism or the African American experience, a far cry in fact. And the jury, with all respect due to each of the jurors, most likely knows little about what it is to be born with a silver spoon in one’s mouth. The Defendants are, have been and will always be men of privilege. The jury, as a matter of profiling by appearance alone, does not share this providence.

The breadth of the evidence that was admitted, or excluded, was a remarkable play of legal defense gamesmanship, cleverly manipulated to share as little damaging information as possible. This is not unusual. But anyone who thinks that this was not calculated as the financiers of Platinum’s top brass were defrauding their investors is either naive or stupid. We believe, based upon previous experiences of some of that brass and their closest confidants, that Platinum Partners knew what to expect if their fiefdom fell. And as they were performing their magical feats of financial optical illusions, they set the stage for a worst-case-scenario.

Very early on the Judge presiding over the case ruled that Murray Huberfeld’s conviction for bribery, the avalanche that set in motion the public unraveling of Platinum Partners, was not permissible evidence in the case against Nordlicht, Levy and SanFilippo. The fact that Huberfeld was acting in consort with the partners at Platinum to bribe Norman Seabrook and entice COBA money was deemed to be outside the scope of the presentation that the government could make to the jury. As such, the corresponding testimony of Jonah Rechnitz in the previous trials was also not admissible evidence. The legal maneuvering was brilliant, awe inspiring.

Huberfeld acted as an Agent of Platinum Partners when he convinced Seabrook to invest. He was one of Platinum Partners’ alter egos. His actions and the resulting convictions could have set the stage for a clear picture for the jury regarding the maneuvering to bring in investors.

But it was deemed inadmissible.

The judge has already dismissed the count of “Fraudulent Investment Scheme” from the indictment.  Why? Because the government proved no match for the defense team. They failed ingloriously to use the same arguments the judge made for dismissal, as proof of guilt, namely that Platinum Partners’ partners calculated what needed to be put in place to cover their collective asses, the “CYA” term of endearment. The hiring of a valuation team was not a sign of care and compliance, quite the opposite. It was a distraction to mislead the government into believing that the valuations were conducted honestly.

 

B. Fraudulent Investment Scheme
As to the fraudulent investment scheme, defendants’ motion for a judgment of acquittal under Rule 29 is granted as to the allegation that they overvalued level 3 assets but otherwise denied.
The indictment alleges that defendants overvalued Platinum’s level 3 assets, but none of the Government’s witnesses challenged the accuracy of Platinum’s valuations of these assets. The Government has not even introduced witnesses who purport to be qualified to challenge these valuations, let alone attempted to introduce expert witnesses who could have guided the jury through assessing the values of level 3 assets – which are, by definition, difficult to value.

Case 1:16-cr-00640-BMC Document 752 Filed 06/17/19 Page 4 of 9 PageID #: 10473
5
Nor has the government shown that Platinum’s process for obtaining these valuations is so deeply flawed that the jury can fairly infer that the valuations were false, and fraudulently so. To the contrary, the testimony has shown that Platinum hired third parties to confirm its valuations; hired an experienced director of valuations; and maintained a valuation committee. There is insufficient evidence for a reasonable juror to conclude that defendants have falsified any valuations, let alone evidence that would support defendants’ conviction for fraudulently overvaluing assets.

Contrary to the Judge’s comments, Level 3 assets are not difficult to value if you mark them against the market in which they are traded. The government simply needed to find a market against which to mark the assets.

Justice will not be served because the perpetrators of the crimes have far greater knowledge of their craft than the government prosecutors. The brilliance of the defense attorneys in making it all look so complicated is not by chance. Platinum’s partners took their precautionary measures when they placed a value on the assets well above their market. They had a team of quasi-conspirators in place.

The government needed to bring in a valuation expert to counter what Platinum was suggesting, that the valuation team was evidence they they acted admirably and honestly. Our analysis is that the Defendants breached their fiduciary duty to their investors by over-valuing assets, that they had taken all the necessary precautions to make it look kosher and that this was choreographed with remarkable dexterity. In reality, the magicians at Platinum had performed what is known as “CYA” and had done so with the skill commensurate with their experience, what any good hedge fund manager would have done.

Platinum Partners’ partners knew what they were doing. The very argument that the judge makes regarding Platinum’s valuation team should be the argument that substantiates the fraud: that Platinum hired the people who would paint a rosy picture to cover up financial impropriety. They brought in Picasso and commissioned him a painting, and paint he did.

Platinum knew its assets were worth far less than they were being valued and created a charade. The told “a tale, full of sound and fury” (Shakespeare) but for them, it is signifying exactly what they wanted it to… everything. 

But we digress. As the Judge rightly pointed out, a reasonable juror would likely not have concluded that the Defendants falsified valuations.

We believe, however, that it is not because the charge is wrong but because the government did not understand that the very act of hiring a valuation committees and valuations’ experts was just part of the magic, the optical illusion.

Platinum Partners’ victims are many, a vast range of people, mostly from their own community. Their victims are also COBA members who deserve the best the government has to offer and is not getting their justice.

The Defendants’ seats in the courtroom are full, almost every day while the Plaintiff’s seats are comprised mostly of victims, their lawyers, journalists and those most curious. It is a sad state of affairs for the greater Jewish collective.

For a parent, a child can do no wrong so it is understandable that the Defendants’ families would be making a show of support. But, an acquittal poses an existential threat to the greater Jewish identity.  Not only do we surmise that these men are likely already planning their next major magic show, but we fear the darkness that would come of an acquittal.

Justice should be served. The victims are entitled to justice and the greater Jewish collective deserves the optics of an equitable distribution of accountability, only accomplished by a conviction. But the government will need to start pulling better punches, or a rabbit from a hat.

LM

Esformes – Found Guilty in Kickbacks and Bribery Scheme – the Same is Happening Throughout New York

UPDATED 10:44 pm 2.May.2019

Esformes is Not Alone – a New York Nursing Facility Unnamed and Likely Unconnected to Esformes but with the Same M.O.

Dear Readers:

Several months ago we received a call. It was from a woman caring for a family member in a nursing/rehabilitation center in New York. We were told that at the time her relative was admitted, the ownership was a well known and rather notorious facility group. The home had been flagged for numerous violations under the initial ownership, publicly available information. We did not write anything because we did not want the entanglements and could not at the time substantiate her claims.

By the time her relative left, we were told the home had changed hands and was owned by another group; and the care had significantly deteriorated. At some point during late 2018/early 2019 the facility changed hands. Those records, at least the ones that illustrate a uniquely questionable transfer, are available online. We have been told, and several articles have come out publicly that nursing homes will often just switch hands because under new ownership, the ratings available on the Medicare/Medicaid sites gets wiped clean, even though ownership may not completely change. It’s a strategic misrepresentation, a game, and apparently legal.

Our caller’s complaints when she first contacted us was that her relative was not getting the care charged to Medicaid. He was not getting the therapy charged and claimed. He was allegedly getting treatment and medication that was not actually being provided and the care he was supposed to get was nowhere to be found. She complained endlessly to the facility and elicited the assistance of the Department of Health and various NYS entities. 

The facility would not release him to her care or discharge him. Each time she would be told her relative was being released, she would then be told that she was not getting discharge papers. The administration kept claiming something new was wrong with her relative, a new service was required, new forms of care were needed.

That service was never forthcoming, though Medicaid was charged.

She contacted us regularly both before and after the home changed hands and we have that information and photographs, a few of which support some of her claims. She also contacted the State and we have been told that they initially tried to assist; but as soon as the facility changed hands, the Department of Health refused further assistance. We wonder whether someone on the State level has been paid to keep this quiet to allow for this owner to continue to operate.

We will protect our caller’s confidentiality except as necessitated by law enforcement. 

At one point her relative was sent to a hospital and was summarily returned to the facility after recovering from repeated bouts of pneumonia. We have been advised that the Social Worker at the hospital conveyed to her that they are told to continue sending people to the nursing home in question and others under the same ownership. Our caller has commented that she thinks people at the hospital are being incentivized to send people to these facilities. We cannot substantiate this part of the story yet. It would take someone with access to subpoenas to get those records.

It is, however, another reason why the facility and its ownership remains unnamed in this post.

We have been told, and this has been corroborated by a number of former patients at the same facility, that there is a pattern and practice of charging healthcare and medicaid exorbitant sums of money for treatment that is never supplied, for therapy that is never provided and for medications that are not actually doled out. The patients can get copies of their bills if they demand them (and some have) and they know when their loved ones are being denied services, or simply not offered those services.

There is much more.

From our own research we discovered a few red flags. The current ownership structure raises questions. The facility’s owners appear to be a group; but we have discovered that this particular nursing facility has a series of UCC liens on it in the State of New York from March of 2019 or thereabouts under the name of someone not listed on the official records of the State or available records as a “direct” owner. This is not quite kosher, unless the person listed on the UCC’s was granted rights to encumber the facility absent direct ownership or as an “indirect owner.” That seems odd. And what does that actually mean? 

Why would anyone have the rights to encumber assets they do not own directly?

As to the condition of this  facility, we would avoid it for even a fish tank, nonetheless the health of the elderly and most vulnerable within our community. We have been told beyond the litany of potentially questionable behaviors, the odd ownership structure and the seemingly financially incestuous relationship between the direct versus the indirect owners, the place is understaffed, dirty and the patients are not receiving even a modicum of the care required. We have further been advised that the food is inadequate, if edible, the sheets and linens are not cleaned regularly and bandages and other first aid measures are not properly attended to and it takes extreme measures to convince staff to have a patient sent to the hospital. 

Our hope is that the owners who may or may not read this post, be well advised that we are following this story carefully. We are digging and will continue to dig. Should law enforcement want information we will gladly pass it on.

To the owners, may you one day wind up in your own nursing care facilities; and may you get no better than the worst care you provide your victims, and they are victims.

Esformes is not alone. Our elderly deserve better. The State of New York should be paying attention.

Nursing Home Owner Found Guilty in Kickbacks, Bribery Scheme

Esformes and Multi-Billion Dollar Fraud Yields Mixed Results from Federal Jury – [Law360]

Feds Get Mixed Results In Esformes Forfeiture Bid

Law360, Miami (April 9, 2019, 8:28 PM EDT) — A federal jury found Tuesday that nursing home mogul Philip Esformes should forfeit his interests in the operating companies for seven Miami-area facilities after his conviction for money laundering, but didn’t give the government most of the assets it sought.

Esformes’ counsel Roy Black of Black Srebnick Kornspan & Stumpf PA said the outcome exceeded the defense’s expectations, as the government effectively came away with only the operating licenses for the facilities but none of the various physical assets it sought, including money in various bank accounts and Esformes’ interests in the businesses’ real estate and several personal properties.

“Definitely, we did far better than we thought we would based on the counts of conviction,” Black told Law360.

The jury’s ruling in this second phase of the case continued a streak of mixed results for the government, despite prosecutors securing a significant conviction overall. The jury found Esformes, 50, guilty Friday on 20 counts of paying and receiving kickbacks, money laundering, bribery, and obstruction of justice at the end of a two-month criminal trial, but the convictions lacked any substantive health care fraud charges, even after the government consistently billed the case as the largest health care fraud case in history.

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Esformes Convicted – New York’s Versions of Esformes Need to be Prosecuted – Tish James Are you In?

Money, gavel

‘Parasite’ Esformes convicted in $1.3B nursing home fraud, could face remaining years in prison

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.

He was first arrested in July 2016 and has been held without bond since. He could spend the rest of his life in prison, even without a healthcare fraud conspiracy, the Miami Herald said Friday.

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Nursing Home Owners Should be Under Greater Scrutiny: Philip Esformes and His 1.5M Ferrari are Not Alone in a Class of Master Manipulators of the System

Medicare Funds Traced To $1.6M Ferrari In Esformes Trial

Law360, Miami (March 13, 2019, 11:41 PM EDT) — A forensic accountant testified Wednesday at the health care fraud trial of Philip Esformes how he traced Medicare and Medicaid funds through the Miami businessman’s nursing facility network to payments for…
To read the article in its entirety on Law360 click here.
ADDITIONAL READING:

US v Philip Esformes – Healthcare Fraud Trial of the Century

Philip Esformes is the poster boy in the biggest Medicare fraud trial in history. Prosecutors say he is the mastermind of a $1 billion fraud scheme. His trial, which began earlier this month, is one for the books. The evidence thus far can only be described as wild. Miami Vice meets the Sopranos.

In this post, we will pull back the curtain and demonstrate how ordinary healthcare workers and patients can take down a Goliath.

Until his arrest in 2016, Esformes was the ultimate jetsetter. Private jets, luxury mansions and a lifestyle none of us can afford. If prosecutors are right, however, we certainly paid for his high living.

According to the indictment, Esformes owned many Miami area nursing homes and assisted living facilities. Much of his revenues came from Medicare and Medicaid. Those programs, of course, are funded with tax dollars.

The government says Esformes gave kickbacks to physicians in return for medically unnecessary referrals to his facilities. That means he was bribing doctors to admit patients into his nursing homes even if they didn’t need that level of care.

The bribes were a two way street.

Prosecutors say that Esformes accepted bribes from other healthcare providers interested in getting business from his nursing homes. These included bribes from nursing companies, home care services, labs, vision care and therapy providers. Some bribes were in cash while others were allegedly payments to escorts enjoyed by Esformes.

One of Esformes’ co-conspirators is a physician’s assistant who would sometimes sign nursing home referrals without even meeting the patient.

It seems everyone was raking in the dough, even if the patients weren’t benefitting and with no regard to the taxpayers footing the bill.

As the trial started, all of Esformes’ co-conspirators pleaded guilty. That leaves him fighting the charges alone.

Most of the charges against Esformes are criminal conspiracy, wire fraud and Medicare fraud related.

There is also a charge of obstruction of justice. The indictment says that in 2015, he plotted with two brothers to get one out of the United States. The brothers were potential prosecution witnesses in the case. Unbeknownst to Esformes, the brothers were already cooperating with the feds and recorded a call discussing the scheme.

Shocking Evidence Revealed at Trial

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Philip Esformes, Nursing Homes and U Penn Basketball Bribes, a Pillar of the Jewish Community

Former Penn basketball coach says he received $300K bribe

Former University of Pennsylvania basketball coach Jerome Allen – now a coach with the Boston Celtics – testified during a federal criminal trial that he accepted nearly $300,000 in bribes to use a priority varsity sports slot to accept a businessman’s son into the Philadelphia Ivy League school, multiple media outlets are reporting.

Allen was testifying in a case involving Philip Esformes, a Miami nursing home mogul on trial for alleged Medicare and Medicaid fraud.

Here’s what ESPN.com is reporting:

Allen testified that he trained Esformes’ son, Morris, in basketball during several trips to Miami, in which Esformes paid for Allen to stay in beachfront hotels, ride in limousines and attend Miami Heat games. After the workouts, Esformes handed him plastic bags filled with about $10,000 in cash, Allen told the jury, according to Law360.com. Esformes told Allen his son’s dream was to attend Penn and play basketball for the Quakers. If Allen made that happen, Esformes told him, they would be “family for life.”

To read the article in its entirety click here.