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Trump鈥檚 Pardons Included Health Care Execs Behind Massive Frauds

At the last minute, President Donald Trump granted pardons to several individuals convicted in huge Medicare swindles that prosecutors alleged often harmed or endangered elderly and infirm patients while fleecing taxpayers.

鈥淭hese aren鈥檛 just technical financial crimes. These were major, major crimes,鈥 said Louis Saccoccio, chief executive officer of the National Health Care Anti-Fraud Association, an advocacy group.

The list of some 200 Trump pardons or commutations, most issued as he vacated the White House this week, included at least seven doctors or health care entrepreneurs who ran discredited health care enterprises, from nursing homes to pain clinics. One is a former doctor and California hospital owner embroiled in a massive workers鈥 compensation kickback scheme that prosecutors alleged prompted more than 14,000 dubious spinal surgeries. Another was in prison after prosecutors accused him of ripping off more than $1 billion from Medicare and Medicaid through nursing homes and other senior care facilities, among the largest frauds in U.S. history.

鈥淎ll of us are shaking our heads with these insurance fraud criminals just walking free,鈥 said Matthew Smith, executive director of the Coalition Against Insurance Fraud. The White House argued all deserved a second chance. One man was said to have devoted himself to prayer, while another planned to resume charity work or other community service. Others won clemency at the request of prominent Republican ex-attorneys general or others who argued their crimes were victimless or said critical errors by prosecutors had led to improper convictions.

Trump commuted the of former nursing home magnate Philip Esformes in late December. He was serving a 20-year sentence for bilking $1 billion from Medicare and Medicaid. An FBI agent called him "a man driven by almost unbounded greed.鈥 Prosecutors said that Esformes used proceeds from his crimes to make a series of 鈥渆xtravagant purchases, including luxury automobiles and a $360,000 watch.鈥

Esformes also bribed the basketball coach at the University of Pennsylvania 鈥渋n exchange for his assistance in gaining admission for his son into the university,鈥 according to prosecutors.

Fraud investigators had cheered the conviction. In 2019, the National Health Care Anti-Fraud Association gave its annual award to the team responsible for making the case. Saccoccio said that such cases are complex and that investigators sometimes spend years and put their 鈥渉eart and soul鈥 into them. 鈥淭hey get a conviction and then they see this happen. It has to be somewhat demoralizing.鈥

Tim McCormack, a Maine lawyer who represented a whistleblower in a 2007 kickback case involving Esformes, said these cases 鈥渁re not just about stealing money.鈥

鈥淭his is about betraying their duty to their patients. This is about using their vulnerable, sick and trusting patients as an ATM to line their already rich pockets,鈥 he said. He added: 鈥淭hese pardons send the message that if you are rich and connected and powerful enough, then you are above the law.鈥

The Trump White House saw things much differently.

鈥淲hile in prison, Mr. Esformes, who is 52, has been devoted to prayer and repentance and is in declining health,鈥 the White House pardon statement said.

The White House said the action was backed by former Attorneys General Edwin Meese and Michael Mukasey, while Ken Starr, one of Trump鈥檚 lawyers in his first impeachment trial, filed briefs in support of his appeal claiming prosecutorial misconduct related to violating attorney-client privilege.

Trump also commuted the sentence of Salomon Melgen, a Florida eye doctor who had served four years in federal prison for fraud. That case also ensnared U.S. Sen. Robert Menendez (D-N.J.), who was acquitted in the case and helped seek the action for his friend, according to the White House.

Prosecutors had accused Melgen of endangering patients with needless injections to treat macular degeneration and other unnecessary medical care, describing his actions as 鈥渢ruly horrific鈥 and 鈥渂arbaric and inhumane,鈥 according to a court filing.

Melgen 鈥渘ot only defrauded the Medicare program of tens of millions of dollars, but he abused his patients 鈥 who were elderly, infirm, and often disabled 鈥 in the process,鈥 prosecutors wrote.

These treatments 鈥渋nvolved sticking needles in their eyes, burning their retinas with a laser, and injecting dyes into their bloodstream.鈥

Prosecutors said the scheme raked in "a staggering amount of money.鈥 Between 2008 and 2013, Medicare paid the solo practitioner about $100 million. He took in an additional $10 million from Medicaid, the government health care program for low-income people, $62 million from private insurance, and approximately $3 million in patients鈥 payments, prosecutors said.

In commuting Melgen鈥檚 sentence, Trump cited support from Menendez and U.S. Rep. Mario Diaz-Balart (R-Fla.). 鈥淣umerous patients and friends testify to his generosity in treating all patients, especially those unable to pay or unable to afford healthcare insurance,鈥 the statement said.

In a statement, Melgen, 66, thanked Trump and said his decision ended 鈥渁 serious miscarriage of justice.鈥

鈥淭hroughout this ordeal, I have come to realize the very deep flaws in our justice system and how people are at the complete mercy of prosecutors and judges. As of today, I am committed to fighting for unjustly incarcerated people,鈥 Melgen said. He denied harming any patients.

Faustino Bernadett, a former California anesthesiologist and hospital owner, received a full pardon. He had been sentenced to 15 months in prison in connection with a scheme that paid kickbacks to doctors for admitting patients to Pacific Hospital of Long Beach for spinal surgery and other treatments.

鈥淎s a physician himself, defendant knew that exchanging thousands of dollars in kickbacks in return for spinal surgery services was illegal and unethical,鈥 prosecutors wrote.

Many of the spinal surgery patients 鈥渨ere injured workers covered by workers鈥 compensation insurance. Those patient-victims were often blue-collar workers who were especially vulnerable as a result of their injuries,鈥 according to prosecutors.

The White House said the conviction 鈥渨as the only major blemish鈥 on the doctor鈥檚 record. While Bernadett failed to report the kickback scheme, 鈥渉e was not part of the underlying scheme itself,鈥 according to the White House.

The White House also said Bernadett was involved in numerous charitable activities, including 鈥渉elping protect his community from COVID-19.鈥 鈥淧resident Trump determined that it is in the interests of justice and Dr. Bernadett鈥檚 community that he may continue his volunteer and charitable work,鈥 the White House statement read.

Others who received pardons or commutations , who was said to have been issued the longest sentence ever for a white collar crime 鈥 835 years. 鈥淢r. Weiss was convicted of racketeering, wire fraud, money laundering, and obstruction of justice, for which he has already served over 18 years and paid substantial restitution. He is 66 years old and suffers from chronic health conditions,鈥 according to the White House.

John Davis, the former CEO of Comprehensive Pain Specialists, the Tennessee-based chain of pain management clinics, had spent four months in prison. Federal prosecutors charged Davis with accepting more than $750,000 in illegal bribes and kickbacks in a scheme that billed Medicare $4.6 million for durable medical equipment.

Trump鈥檚 pardon statement cited support from country singer Luke Bryan, said to be a friend of Davis鈥.

鈥淣otably, no one suffered financially as a result of his crime and he has no other criminal record,鈥 the White House statement reads.

鈥淧rior to his conviction, Mr. Davis was well known in his community as an active supporter of local charities. He is described as hardworking and deeply committed to his family and country. Mr. Davis and his wife have been married for 15 years, and he is the father of three young children.鈥

CPS was the subject of a November 2017 investigation by KHN that scrutinized its Medicare billings for urine drug testing. Medicare paid the company at least $11 million for urine screenings and related tests in 2014, when five of CPS鈥 medical professionals stood among the nation鈥檚 top such Medicare billers.

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