But an attorney for 50-year-old Philip Esformes told jurors as trial began in Miami that he was no criminal but a driven businessman who legitimately operated more than 20 nursing homes and assisted living facilities in Florida.
Assistant U.S. Attorney Elizabeth Young told the jury the fraud involved four steps: bribing doctors to refer patients to Esformes' facilities, moving them to other facilities when their Medicare eligibility at the first place expired, selling access to patients to others so they could also defraud the government programs, and then starting the process again.
"I happened over and over and over again," Young said. "Rinse and repeat. And it happened for 10 years."
Prosecutors say the Esformes network and co-conspirators falsely billed Medicare alone for $1 billion during the scheme, of which about $500 million was paid. Much of the evidence relies on audio recordings between Esformes and two co-conspirators who were secretly cooperating with the FBI and have previously pleaded guilty, Young said.
"He was the mastermind. He made this happen. The evidence will show he was involved every step of the way," Young said.
Esformes attorney Roy Black, however, told jurors they should be skeptical of the motivations and backgrounds of many government witnesses, including convicted co-conspirators Gabriel and Guillermo Delgado.
"They have stacked their case with con artists, liars, fraudsters and even drug traffickers," Black said. "We will try to expose all that we can."
Black described many of the suspicious billings to government health programs as merely business disputes rather than fraud. In addition, Black said Esformes relied on medical professionals to decide what kind of treatment a Medicare or Medicaid patient needed.
"He is a businessman. He does not make medical decisions," Black said. "He doesn't diagnose people. He doesn't treat people. That requires doctors."
In one twist, former University of Pennsylvania basketball coach Jerome Allen pleaded guilty last year to accepting about $18,000 in bribes from Esformes in an effort to get one of his sons onto the Ivy League school's team.
Allen, now an assistant coach for the Boston Celtics who is cooperating in the Esformes case, faces a maximum of 10 years in prison when sentenced in March.
Esformes was also accused of paying a Florida health regulator $100,000 in bribes in return for tips about when inspectors planned surprise visits to his facilities and when patients made complaints.
A hospital administrator and a physician's assistant who were charged along with Esformes have pleaded guilty for their roles in the alleged scheme and may testify against Esformes.
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