By James M. Berklan
Convicted former nursing home chain operator Philip Esformes had his prison sentence commuted by then-President Trump in 2020, but a federal appeals court ruled Friday he will still be liable for $44 million in penalties.
Esformes was convicted of defrauding the government of at least $1.3 billion in a complex net involving healthcare fraud, illegal kickbacks and money laundering. Esformes personally netted about $37 million, authorities said.
A unanimous three-judge ruling in the 11th U.S. Circuit Court of Appeals found that federal prosecutors had not improperly reviewed material covered by attorney-client privilege.
U.S. District Judge Robert Scola Jr. in Miami excluded privileged materials but did not dismiss the entire case, which was procedurally appropriate, especially because the captured documents were not the basis for the case, the appeals court opinion stated.
In 2019, a jury found Esformes guilty of bribing physicians for illegal referrals and inappropriate collection of payment from 1998 to 2016 for services that were either unnecessary or not performed. The eight-week trial and prelude to it captivated the long-term care sector as well as a large slice of the general public due to the extreme level of graft involved. Scola sentenced Esformes to 20 years in prison.
Esformes’ facilities included several dozen nursing homes and assisted living communities, stretching from Chicago to Miami.
In his final weeks in office, Trump commuted Esformes’ sentence, citing alleged prosecutorial misconduct and the defendant’s reported declining health.
Federal prosecutors have said they intend to retry Esformes on some of the charges that the jury split on regarding the $1.3 billion fraud case.
His conviction there was only his most recent high-stakes legal showdown with federal authorities. As noted in the Chicago Tribune in 2016, Esformes and his father, Morris, were involved in several multi-million-dollar settlements regarding alleged misuse of their long-term care and other healthcare holdings in Illinois, Florida and Missouri. Part of a video recorded of an Esformes deposition can be found in another article by that newspaper reporting on his 2019 sentencing.
A lengthy summary of convictions, charges and allegations against Philip Esformes was more recently published by McKnight’s legal affairs blogger Neville Bilimoria in Chicago Lawyer in 2019.