Philip Esformes (pictured), son of Rabbi Morris I. Esformes, faces another indictment for his family’s career medical fraud.

MEDICARE AND MEDICAID fraud and other types of medical fraud can be extremely lucrative. In the latest case involving the Esformes family, it is estimated to amount to $1 billion from 2002 to 2016.

“This is the largest single criminal health care fraud case ever brought against individuals by the Department of Justice,” Leslie Caldwell, assistant attorney general of the department’s criminal division, said in a statement.

What Caldwell didn’t say that is that the fraud shouldn’t have been allowed to occur in the first place. The Esformes have long been known to authorities yet had been allowed to steal from taxpayers and abuse the people held in their care for far too long.

Rabbi Morris I. Esformes and his son Philip Esformes operated dozens of nursing homes in Illinois and Florida and used the people in their care to generate illicit payments from the government and get kick-backs from other medical service providers. The earliest complaints about their facilities goes back to the 1990s.

Philip Esformes is currently charged with colluding with doctors, hospitals and medical service providers to shuttle patients among their facilities for the purpose of filling their beds and maximizing Medicare reimbursements and engaging in fraudulent billings for treatments not needed.

While the Esformes family has long been on the radar of authorities, Rabbi Morris I. Esformes used his social and political connections to evade prosecution. In 2005, the esteemed Rabbi played the religion card when he was facing charges of abuse and neglect for abominable conditions in his Chicago nursing homes when he accused the authorities of being anti-mental health, racist and against Jews. “Beside the fact that they’re anti-mental health and anti-black, they’re probably anti-Jew because I’m an ordained rabbi,” he said.

An early co-conspirator with the Esformes, Chicago doctor Roland Borrasi, was recorded by federal agents saying, “Basically, I have a commodity; my commodity is nursing home patients.”

And those patients were treated as nothing more than commodities. Patients were given treatments that weren’t needed or even related to what conditions they might have had. The treaments damaged their health and shortened their lives. Taxpayers picked-up the tab.

To get the commodity, Borrasi claims to have essentially rented patients from the Esformes’ nursing homes. Lynn Madeja, Borrasi’s medical biller and mistress, told government agents that Borrasi had said: “I got to give Philip $1,000 or $10,000” to use Esformes’ patients.

Despite the evidence against them, the Esformes were not indicted in the earlier cases and were allowed to continue to operate their racket unhindered. In a separate case in 2013, the Esformes agreed to pay the government $5 million to settle allegations that they took kickbacks related to the 2004 sale of a pharmacy company.

The Esformes family is just one of many operators in a criminal operation that permeats the medical industry. According to an article in the Economist in 2014, the RAND Corporation estimates that medical fraud in the United States amounts to $272 billion each year.

The medical industy remains the third leading cause of premature death. The three biggest killers are:

Heart disease (clogged arteries) Cancer Medical mafia (doctors, nurses, hospitals, drug companies)

While prosecutions of medical fraud have increased in recent years, the problem remains massive and pervasive.

The next time you seek medical treatment you might want to reconsider who and what you might be dealing with and proceed with caution. Clearly, doctor does not always know best, or have good intentions.

Appendix

For years, wealthy nursing home operator Philip Esformes seemed to live in perpetual motion, using private jets to travel between his Water Tower Place condominium and his mansions in Miami and Los Angeles.

Now federal authorities are applying extraordinary court pressure to keep 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 news conference announcing the charges.

Arrested at one of his $2 million estates on the Miami Beach waterfront that morning 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.

His confinement in the Miami Federal Detention Center marks a new challenge for a business family that has withstood two decades of Justice Department probes and 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. Morris Esformes has an endowed medical professorship named for him at the University of Chicago, and they have 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, government records and Tribune interviews show.

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. Drug addicts were allegedly lured to the facilities with promises of narcotics, and prosecutors say some received OxyContin and fentanyl without a physician’s order to entice them to stay.

In recent court filings, prosecutors have gone beyond the allegations of the indictment to reveal new claims of patient harm and corruption.

One patient, listed as “S.J.” in court documents, told agents she was offered a bed at Esformes’ Oceanside Extended Care Center “because she was homeless and looking for a place to stay.”

“S.J. did not get or even need the skilled nursing services that were billed to Medicare on her behalf by Oceanside Extended Care,” federal authorities wrote. “Instead, the Esformes Network fed her narcotic addiction in order to use S.J. as a pawn to steal from Medicare.”

In another example, Esformes allegedly instructed a co-conspirator to “bribe a state (Florida) regulator” so Esformes could learn in advance which facilities inspectors planned to visit, and “modify and falsify files at his facilities before state regulators inspected.”

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.”

As part of the kickbacks exchanged between Philip Esformes and corrupt medical professionals, the Justice Department alleged, “high-end escorts” were flown to Orlando and chauffeured in limousines for liaisons with Esformes at the Ritz-Carlton Hotel.

Esformes, 47, who drove a $1.6 million Ferrari Aperta and published a blog with fitness tips for busy executives, now faces a potential life sentence if convicted on charges of fraud, conspiracy and obstruction of justice, government records show.

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.

“Philip Esformes is fighting hard to obtain his release on bond and to clear his name,” his attorney Michael Pasano told the Tribune. “Mr. Esformes stands by his lifelong record of hard work and success, of providing quality service to people in his nursing homes, and of helping persons in need. He adamantly denies any wrongdoing and promises to fight vigorously to show the truth behind the lies being brought against him.”

In a letter to Miami U.S. District Judge Joan A. Lenard, former classmate and current school principal Rabbi Eli Samber described Esformes as a devoted student at the Arie Crown Hebrew Day School in Skokie. Later, “when both of us were in our twenties and both newly married, Philip and I had a fixed time during the week that we would study Bible together,” Samber’s letter said. “This experience enabled me to see the depth of his character.”

Morris Esformes, 70, has not been charged in the case. He helped round up affidavits from 30 Florida families who pledged homes worth more than $3 million to collateralize a bond for Philip Esformes, records and interviews show. Eight were relatives, but many others live in a small community where Morris Esformes built a community center and day school. Morris Esformes also offered his own substantial wealth to post bond for his son. He did not respond to requests for comment. In a bid to win his own release, Philip Esformes proposed to the court to live under home confinement with 24-hour monitoring by a staff of off-duty police paid at his expense, highly restricted visitations limited to family and religious leaders, and no Internet or cellphones. But Lenard on Wednesday issued a final ruling ordering Esformes held without bond after prosecutors argued that he might try to flee or obstruct justice if he was released pending trial. To underscore their point, the Justice Department last month made an unusually early disclosure of key evidence by filing a 200-page transcript of a secretly recorded conversation in which Esformes allegedly offered to fund a co-conspirator’s flight from the United States so the man could avoid trial.