Assistant Attorney General Leslie R. Caldwell Delivers Remarks at Press Conference Announcing Filing of Charges in Connection with $1 Billion Health Care Fraud Scheme

Remarks as prepared for delivery

Thank you, U.S. Attorney [Wifredo] Ferrer.

This morning, charges were unsealed against three individuals at the center of a massive scheme that fraudulently billed more than $1 billion to Medicare and Medicaid.  This is the largest single criminal health care fraud case ever brought against individuals by the Department of Justice, and is further evidence of how successful data-driven law enforcement has been as a tool in the ongoing fight against health care fraud.

At the center of this alleged scheme was a network of health care facilities across South Florida that were owned or controlled by Philip Esformes, who is charged today.  Also charged today are a hospital administrator and physician’s assistant, who are alleged to have conspired with Esformes.  Together, these co-conspirators are accused of using thousands of people, at more than 20 nursing homes and assisted living facilities run by Esformes, as cogs in the machinery of their massive fraud scheme, rather than medical patients for whom they were supposed to provide care.

The indictment alleges that the co-conspirators wove together a network of corrupt doctors, hospitals, and other health care providers across South Florida in a sprawling conspiracy to cheat taxpayers out of millions of dollars through false and fraudulent claims to Medicare and Medicaid.  At its core, the scheme was simple: the conspirators allegedly paid bribes and kickbacks to get patients admitted to facilities owned or controlled by Esformes, where the patients often were given medically unnecessary, and at times harmful, treatment.

As alleged in the charging documents, the conspirators were ruthlessly efficient.  When a patient reached Medicare-imposed length of stay limits at one facility, the conspirators, through their network of corrupt health care providers, are alleged to have paid and received bribes and kickbacks as they arranged to have patients moved into, out of, and between different facilities, all the while running up the taxpayer’s tab as they billed Medicare for fraudulent, unnecessary and sometimes fabricated treatment. 

All of this was done with little regard for the patients.  Among the thousands of people cycled through the fraudulent network were, for example, drug addicts who were allegedly prescribed opioids – including OxyContin and Fentanyl – and other narcotics in order to entice them to stay in facilities where they didn’t belong.  Meanwhile, Esformes and his co-conspirators lined their pockets to the tune of tens of millions of dollars. 

The Medicare Fraud Strike Force was formed here in Miami nearly a decade ago, when the Criminal Division partnered with the FBI and the Department of Health and Human Services Office of the Inspector General (HHS-OIG).  Together with our partners at the U.S. Attorney’s Office for the Southern District of Florida, our work combating health care fraud has had a direct impact on fraudulent billings in South Florida, and over the last several years we have expanded the Medicare Fraud Strike Force to other cities and regions where fraud is endemic.  As of today, the Strike Force’s prosecutors and agents have now brought criminal cases against defendants accused of billing the Medicare program more than $10 billion.

Unfortunately, South Florida remains ground zero for these types of scams, as today’s case illustrates.  Esformes and his co-conspirators are accused of having committed this fraud for years.  When the Medicare Fraud Strike Force was created in 2007, a case like this one would not have been possible.  But as technology has advanced, so have we.

Just last month, the department announced the largest-ever national health care fraud takedown, bringing charges against more than 300 individuals, in connection with more than $900 million in false billings, including more than 100 defendants in South Florida alone.  I said at the time that the Medicare Fraud Strike Force is a model of 21^st Century data-driven law enforcement, and today’s case is a prime example. 

Working with our partners, the Criminal Division used cutting-edge data analysis techniques to identify the massive scope of the fraud that is the subject of today’s case.  We used the tools we have developed that allowed us to detect high-risk providers and suppliers like Esformes.  We are now able to use data to identify links among corrupt providers who otherwise might not seem connected.  These sophisticated tools generated data that was critical in enabling law enforcement to identify the web of facilities and medical professionals involved in this fraud scheme and then to trace the reimbursement claims they made, ultimately identifying more than $1 billion in alleged false and fraudulent claims filed by Esformes and his co-conspirators between 2009 and 2016. 

Those who commit Medicare fraud by filing false claims, paying or receiving bribes or kickbacks, and by engaging in fraudulent medical practices jeopardize the integrity of the taxpayer-funded benefit programs that millions of Americans rely on every day for their well-being.  These criminals abuse basic bonds of trust – between patient and caregiver; between taxpayer and government – and pervert them for their own ends.  This case should be a warning to other criminals who would seek to enrich themselves at the expense of the American people:  we will use all of the data and tools available to us to root out and stop fraud to help ensure that Medicare remains strong for years to come.

I want to thank the members of the Medicare Fraud Strike Force from the FBI and HHS-OIG who worked alongside Criminal Division team and our partners at the U.S. Attorney’s Office for the Southern District of Florida for their work on this case and their ongoing efforts to combat health care fraud.

At this time I would like to turn things back to U.S. Attorney Ferrer.