The Miami Beach businessman, whom jurors found guilty last year on 20 counts of paying and receiving kickbacks, money laundering, bribery and obstruction of justice, focused on the health risks posed by the coronavirus outbreak in his March 27 expedited motion for release. But U.S. District Judge Robert N. Scola Jr. found that Esformes, who was 50 at the time of his trial last spring, is not more vulnerable than other prisoners and that the status of the legal proceedings against him also makes release inappropriate.
"As the government points out in its response, Esformes's asthma is not at an acute level warranting his release after serving less than 25% of his sentence," the judge said. "Virtually every person over the age of 50 has some health condition that could conceivably put that person at a greater risk of succumbing to the coronavirus, but this does not entitle every inmate over 50 to be released."
Judge Scola added that an April 3 memorandum that U.S. Attorney General William Barr issued urging the release of particularly vulnerable inmates is "not a get-out-of-jail-free card for every incarcerated person."
Judge Scola, who presided over Esformes' criminal trial and sentencing last year — and ordered him to pay $38.7 million in forfeiture and $5.5 million in restitution — also said he did not find it appropriate to release Esformes with several counts that jurors left undecided still pending. He noted that a hearing is scheduled for July 17 to discuss setting a date for another jury trial on the remaining counts, including a charge for conspiracy to commit health care fraud and wire fraud.
"Even if it were appropriate for the court to release Esformes on the counts currently on appeal before the Eleventh Circuit (but it is not for all the reasons set forth in the government's response), he still would need to move for and obtain pretrial release on the counts that have not yet been set for retrial," the order said.
Esformes' request for release is one of several that courts have been fielding from notable detainees during the coronavirus pandemic, including Chinese real estate developer Ng Lap Seng, who was found guilty in 2017 of foreign bribery, conspiracy and money laundering, and former Mutual Benefits Corp. CEO Joel Steinger, currently serving a 20-year sentence for orchestrating an $837 million insurance investment scam. Former drug company CEO Martin Shkreli, known as "Pharma Bro," also asked last week to be released for three months to help research a treatment.
Esformes has been detained since his arrest in 2016. He has previously been denied pretrial release by the district court and the Eleventh Circuit, in large part based on what were then allegations that he obstructed justice by urging a co-conspirator to flee the country, the order points out.
"Esformes has now been convicted of that crime. Thus, if anything, the grounds for the continued detention of Esformes are stronger now than they were in 2016 at the time of his original detention hearing," Judge Scola said.
Judge Scola also said in his order that he "has not hesitated" to release inmates where appropriate, citing two examples. "But this is not one of those cases," he said.
In his motion, Esformes said he has long suffered from pulmonary and upper-respiratory problems, among other serious medical conditions, and that these health risks are now "acute" and even "life-threatening" in light of the pandemic. He cited a March 24 letter from his treating physician.
"Simply put, it is an undeniable reality that the deadly and highly contagious virus known as COVID-19 will reach almost all American communities — large and small, wealthy and poor, open and closed. And our prisons are no exception," the motion said. "Esformes' medical condition puts him at the top of the at-risk category."
He described the jury's verdict against him as having "yielded mixed and ambiguous results," pointing in particular to the jurors' inability to reach a decision on the first count for conspiracy to commit health care fraud and wire fraud.
He also noted that he has not previously sought bail pending his appeal and was doing so because of the COVID-19 pandemic. He also agreed to follow stringent house arrest conditions he had offered previously in the case.
In its response, the government argued that Esformes did not show that he is not a flight risk or that release is warranted because his appeal raises a "substantial question of law or fact" that is likely to result in a reversal, a new trial or a lesser sentence.
The government billed its case against Esformes as the largest health care fraud case it has ever prosecuted, although Judge Scola ultimately found at the sentencing hearing that it had proved the alleged scheme caused the federal Medicare and Medicaid programs losses of between $4.9 million to $8.3 million, a distant cry from prosecutors' calculations that placed the figure as high as $1.1 billion.
At trial, prosecutors claimed that Esformes, who owned seven nursing homes and nine assisted living facilities in South Florida, carried out a scheme in which he cycled patients through his facilities, bribing doctors to refer patients to his nursing homes and then moving them to his assisted living facilities once he had charged Medicare for the maximum 100 days the government would pay out for skilled nursing services.
They also secured a conviction on a charge that he bribed former University of Pennsylvania men's basketball coach Jerome Allen to get his son a spot on the school's basketball team and admission into its prestigious Wharton School of Business.
Counsel for Esformes did not immediately respond to a request for comment Friday, and representatives for the U.S. Department of Justice declined to comment beyond the government's filed response.
The government is represented by James V. Hayes, Elizabeth Young and Allan Medina of the U.S. Department of Justice's Criminal Division, and Daren Grove and Nalina Sombuntham of the U.S. Attorney's Office for the Southern District of Florida.
Esformes is represented by Howard M. Srebnick, Roy Black and Jacqueline Perczek of Black Srebnick Kornspan & Stumpf PA and Laurie Webb Daniel and Nicholas R. Boyd of Holland & Knight LLP.
The case is U.S. v. Esformes et al., case number 1:16-cr-20549, in the U.S. District Court for the Southern District of Florida.
--Additional reporting by Carolina Bolado. Editing by Haylee Pearl.
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