Philip Esformes is the Florida nursing home operator convicted in 2019 of running what the Department of Justice called the largest criminal health care fraud case ever brought against individuals, a scheme that produced more than $1 billion in fraudulent Medicare and Medicaid billings. He was sentenced to 20 years in federal prison. In December 2020, President Donald Trump commuted the prison term to time served. Federal prosecutors moved to retry him on six counts the original jury had deadlocked on, and the fight ended in February 2024 when Esformes pleaded guilty to a single conspiracy count and received no additional prison time.
How the Fraud Scheme Worked
Esformes controlled a network of more than 30 skilled nursing and assisted living facilities in the Miami area, along with a stake in Larkin Community Hospital. Prosecutors described a “closed system” that cycled patients between the assisted living facilities, the hospital, and the skilled nursing homes to maximize Medicare reimbursements, layered with nested shell corporations that obscured the family’s financial interests.1Mother Jones. Philip Esformes Trial, Medicare Fraud, Prosecution, Donald Trump Clemency
The mechanics were straightforward once patients were in the door. A physician’s assistant, Arnaldo Carmouze, was bribed to refer patients into the skilled nursing facilities and keep them there for the full 100 days that Medicare would cover. When that window closed, patients moved to an Esformes assisted living facility until a hospital stay could reset their Medicare eligibility and start the cycle again. Admissions happened regardless of medical necessity.2FBI. Three Charged in $1 Billion Medicare Fraud Scheme
Esformes also collected kickbacks for steering patients to outside providers, including community mental health centers and home health agencies, which then billed Medicare and Medicaid for additional unnecessary treatments. Payments were made in cash or disguised as charitable donations, service fees, and sham lease agreements. Prosecutors described “sophisticated money laundering techniques” used to hide the proceeds and Esformes’s role.3U.S. Department of Justice. Three Individuals Charged in $1 Billion Medicare Fraud and Money Laundering Scheme
The Earlier 2006 Settlement
The 2016 indictment was not the first time federal prosecutors had gone after Esformes. In 2006, the Department of Justice brought a civil fraud action alleging that Philip and his father Morris, along with Larkin Community Hospital and other defendants, had paid kickbacks to physicians to induce admissions of Medicare and Medicaid beneficiaries for medically unnecessary treatment. The alleged conduct dated to at least 1997.4U.S. Department of Justice. United States v. Jack Jacobo Michel, M.D., et al.
The case settled for $15.4 million with no admission of wrongdoing, and the Department of Health and Human Services placed a monitor over Larkin. Prosecutors later alleged that Esformes simply adapted, adopting more sophisticated concealment methods, including intermediaries to handle kickback payments.5U.S. Department of Justice. Esformes Motion for Detention In 2013, the family paid an additional $5 million to settle a separate whistleblower lawsuit tied to the sale of a nursing home pharmacy company, again without admitting wrongdoing.6Orlando Sentinel. A Short History of Allegations Against Philip Esformes and His Father Morris
Indictment, Trial, and the 20-Year Sentence
On July 22, 2016, a federal grand jury in the Southern District of Florida unsealed an indictment charging Esformes and two co-defendants with conspiracy, health care fraud, kickbacks, money laundering, and obstruction of justice.3U.S. Department of Justice. Three Individuals Charged in $1 Billion Medicare Fraud and Money Laundering Scheme
Two co-conspirators, Guillermo and Gabriel Delgado, cooperated with the government and recorded roughly 40 hours of conversations with Esformes, including a discussion of a plan to help one of them flee to Israel to avoid trial. Gabriel Delgado testified that he began cooperating after Esformes suggested he commit suicide rather than face charges.7Miami Herald. Philip Esformes Trial
The case went to trial before U.S. District Judge Robert N. Scola and lasted two months. In April 2019, the jury convicted Esformes on 20 of 26 counts, including receiving and paying kickbacks, money laundering, federal program bribery, honest services wire fraud, and obstruction of justice. The jury deadlocked on six counts, including the top count of conspiracy to commit health care fraud and wire fraud.8FindLaw. United States v. Esformes, Nos. 19-13838, 19-14874
On September 13, 2019, Judge Scola sentenced Esformes to 240 months in prison, three years of supervised release, approximately $5.5 million in restitution, and a $38.7 million forfeiture judgment representing the amount obtained through fraudulent billing between 2010 and 2016. In arriving at the sentence, the judge incorporated the conduct underlying the six deadlocked counts, a practice permitted under federal sentencing law.9U.S. Department of Justice. South Florida Health Care Facility Owner Sentenced to 20 Years in Prison
The Penn Basketball Bribery
During the fraud investigation, prosecutors uncovered a separate scheme. Between 2013 and 2015, Esformes paid approximately $300,000 in bribes to Jerome Allen, then the head basketball coach at the University of Pennsylvania, to have his son Morris designated as a “recruited basketball player” and facilitate his admission to Penn and its Wharton School. Morris was admitted and never played for the team.10Miami Herald. Philip Esformes Bribed Penn Coach Jerome Allen
The bribery allegations were folded into the broader fraud trial. Allen pleaded guilty in October 2018 to a bribery-related money laundering charge, cooperated, and testified against Esformes. In July 2019, Allen was sentenced to four years of probation, six months of house arrest, 600 hours of community service, and ordered to pay $202,000 in fines and $18,000 in forfeiture.11Philadelphia Inquirer. Jerome Allen Sentencing, Penn Basketball College Admissions Bribes Scandal The NCAA later imposed a 15-year show-cause penalty on Allen.12ABC News. Penn Coach Jerome Allen 15 Year Penalty
Attorney-Client Privilege Fight
A running thread of the defense, at trial and on appeal, was that federal prosecutors had violated Esformes’s attorney-client privilege. A government “taint team” tasked with segregating privileged materials during a search of his civil attorney’s office was never told the office belonged to a lawyer or given the names of his attorneys; agents were told the lawyer was a “business associate.” Documents marked “privileged and confidential” reached the prosecution team, and the lead prosecutor continued reviewing them for more than two months after being alerted.13U.S. Supreme Court. Esformes Petition for Certiorari, No. 23-95
The district court called the conduct “sloppy, careless, clumsy, and ineffective,” and the government conceded its actions were “reckless.” The courts nonetheless declined to dismiss the indictment, applying a standard that required Esformes to show “actual prejudice” to the trial’s outcome.14U.S. Supreme Court. Esformes Certiorari Reply, No. 23-95 The Eleventh Circuit affirmed the convictions and the financial judgments on January 6, 2023, and the U.S. Supreme Court declined to hear the case on December 11, 2023.15U.S. Supreme Court. Docket No. 23-95, Esformes v. United States
The Trump Commutation
On December 22, 2020, President Donald Trump commuted Esformes’s prison sentence to time served after he had spent roughly four and a half years in federal custody. The commutation was narrow: it left in place the three-year supervised release term, the $5.5 million restitution order, and the $38.7 million forfeiture judgment.16Trump White House Archives. Statement From the Press Secretary Regarding Executive Grants of Clemency
The White House cited support from former Attorneys General Edwin Meese, Michael Mukasey, and John Ashcroft, along with former Attorney General Alberto Gonzales and lawyer Ken Starr, who had filed briefs alleging prosecutorial misconduct.17PBS. Trump’s Pardons Included Health Care Execs Behind Massive Frauds
Behind the scenes, the Aleph Institute, a Jewish humanitarian nonprofit focused on prisoners’ rights, worked to secure the commutation. Attorney Alan Dershowitz, who volunteered with the group, said it “put together the papers” for the clemency petition. The Esformes family had donated $65,000 to the Aleph Institute in the years after the 2016 indictment. The group also paid $50,000 in 2020 to former U.S. Attorney Brett Tolman to lobby on criminal justice issues, though Tolman said he did not work directly on the case.18New York Times. Trump Pardon Clemency Access
The Retrial Fight and 2024 Plea Deal
Because Trump commuted the sentence rather than granting a full pardon, an open question remained: could the government retry Esformes on the six deadlocked counts? In April 2021, federal prosecutors in Miami said they would do exactly that. The defense argued that retrial was barred by both the commutation and the Double Jeopardy Clause, since Judge Scola had already factored the deadlocked conduct into the 20-year sentence.19CNBC. DOJ Plans to Retry Philip Esformes Despite Trump Commuting Sentence
Prosecutors responded that the commutation expressly applied only to the counts of conviction and said nothing about the unresolved charges, noting that on the same day Trump commuted Esformes’s sentence he issued 15 unconditional pardons to other individuals. The Eleventh Circuit held it lacked jurisdiction to rule on the double jeopardy and clemency arguments, finding the issue premature.20CNBC. Philip Esformes, Whose Prison Sentence Trump Commuted, Loses Appeal
Judge Scola himself questioned the “utility” of a retrial, noting he had already “baked the charges on which a jury hung into the prison sentence.” On February 22, 2024, Esformes pleaded guilty to one count of conspiracy to commit health care fraud, and prosecutors dropped the five other pending counts. He was sentenced to time served with no additional jail time, restrictions, or fines beyond his existing financial obligations.21NBC DFW. Trump Clemency Recipient Philip Esformes Pleads Guilty in Medicare Fraud Case
Under the plea, Esformes reaffirmed the $5.5 million restitution obligation to the Centers for Medicare and Medicaid Services, which prosecutors said had already been paid. He also pledged at least $14 million in assets toward the $38.7 million forfeiture judgment, with prosecutors expecting he would ultimately pay at least $30 million through the sale of real estate and business assets.22McKnight’s Senior Living. Philip Esformes Pleads Guilty to Healthcare Fraud, Sentenced to Time Served
What Has Happened Since
On October 13, 2024, Esformes was arrested in Miami Beach on domestic violence-related charges after an incident at the home he shared with his wife, Aurelia Castiel. According to police, an argument about her minor son’s bedtime escalated when Esformes grabbed Castiel’s phone and smashed it as she tried to call 911. Castiel reported that no one was physically injured. He was released on bonds totaling $1,650. At a November 12, 2024, arraignment, the Miami-Dade State Attorney’s Office announced it was “taking no further action,” and the charges were dropped.23Miami Herald. Philip Esformes Arrested on Domestic Violence Charges
The $38.7 million forfeiture judgment is still being contested. In August 2025, Esformes’s ex-wife, Sherri Beth Esformes, filed a petition in federal court in Miami claiming a 50% property interest in the companies and properties the government is trying to recover, and arguing that her claim is superior to the government’s and that the forfeiture order is invalid.24U.S. Congress. House Government Operations Committee Document