Friday, September 29, 2023
Courthouse News Service
Friday, September 29, 2023 | Back issues
Courthouse News Service Courthouse News Service

Fraudster whom Trump let out of prison denied high court relief

Intervention by the former president got a Florida businessman out of his 20-year sentence but left him liable for a $40 million fraud judgment. 

WASHINGTON (CN) — The Supreme Court advanced a $40 million judgment Tuesday against a man who swindled millions of dollars from the U.S. health care system but got his prison sentence cut short.

Justice Clarence Thomas denied emergency relief for Philip Esformes without comment, having opted not to refer the Florida business owner's application to the full court for consideration. 

Back when it charged Esformes, the Justice Department called the case against him the largest health care fraud scheme it had ever prosecuted. In 2019, Esformes was sentenced to 20 years in prison for kickbacks and money laundering. 

The following year, citing Esformes’ commitment to prayer and declining health, former President Donald Trump commuted Esformes' prison term but left him on the hook for an almost $40 million judgment. 

Prosecutors had illustrated at trial how Esformes had robbed the American health care system of millions of dollars by bribing doctors to admit patients to his facilities and then provide inappropriate medical care billed to Medicare and Medicaid. Esformes also bribed a Florida state regulator to notify him in advance of random inspections so that he could hide poor conditions at his facilities. 

Among a series of extravagances Esformes secured with his ill-gotten profits, the government said he bribed the basketball coach at the University of Pennsylvania to admit his son into the university. 

After the unsealing of his indictment in 2016, Esformes claims the government botched its investigation by searching one of his offices despite being warned that the office likely contained attorney-client privileged materials. 

The government created a “taint protocol” prior to the search to mitigate violations of attorney-client privilege, but Esformes says those measures failed to prevent violations of his attorney-client privilege. One box of documents allegedly reviewed by prosecutors contained spreadsheets prepared by the legal assistant to Esformes’ civil attorney and the assistant’s notes about the project. 

A magistrate judge would ultimately detail the government’s misconduct in a 117-page report but still find that the violations did not meet the bar for dismissal of the indictment. 

The district court adopted that report, finding that Esformes had not met the bar for dismissal despite evidence that the prosecutors' work had been sloppy and careless. The jury that found Esformes guilty of conspiracy, obstruction of justice, kickback, bribery and money-laundering charges also hung on six other counts related to health care fraud conspiracy. 

For the money-laundering convictions, Esformes was ordered to forfeit his interest in his companies. The district court also entered a forfeiture money judgment for almost $40 million. 

After Trump commuted Esformes' sentence, the 11th Circuit affirmed his conviction and the $40 million judgment. 

Noting that the government plans to try to retry him on the hung counts, Esformes filed an emergency application at the Supreme Court seeking immediate relief. 

“This case presents two meritorious, certiorari-worthy questions,” Matthew Nicholson, an attorney with Williams & Connolly, wrote in the application for Esformes. “And, on these exceptional facts, retrial would amount to irreparable harm justifying a stay.” 

The application states that the 11th Circuits holding on prosecutorial misconduct diverged from other circuits, making it ripe for the justices’ review on certiorari. 

“That court held that defendants must demonstrate actual prejudice before courts will even consider dismissing an indictment or disqualifying prosecutors for pervasive attorney-client-privilege violations,” Blatt wrote. “In doing so, the Eleventh Circuit further solidified an entrenched, well-recognized split over whether a defendant must prove actual prejudice or whether such prejudice is rebuttably or irrebuttably presumed where prosecutors improperly violate privilege.” 

Follow @KelseyReichmann
Categories / Appeals, Criminal, Government, Health

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.