Convicted doctor links big nursing home operator to kickback scheme, according to U.S. probe
April 18, 2010|By David Jackson and Gary Marx, Tribune reporters
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Corrupt Chicago doctor Roland Borrasi told co-workers he made cash payoffs to one of Illinois' most prominent nursing home operators in exchange for access to a lucrative pool of patients, according to federal investigative reports obtained by the Tribune.
The nursing home operator, Philip Esformes, vehemently denies the allegation.
Lynn Madeja, Borrasi's medical biller and mistress, told government agents that Borrasi had said: "I got to give Philip $1,000 or $10,000." To use Esformes' patients, Borrasi told her, he "had to make it up" with cash, said Madeja, who assisted authorities in their investigation. Borrasi said "it was Esformes' way or no way," Madeja's statement said.
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In addition, the medical director of the now-shuttered Rock Creek Center psychiatric hospital, Dr. Naseem Chaudhry, told federal agents about a conversation in which Borrasi allegedly said he was upset because Rock Creek owed him $200,000. "He was concerned because he needed to give half of it to Esformes," Chaudhry said. Chaudhry pleaded guilty Wednesday to a count of health care fraud.
Federal prosecutors, who last year secured the conviction of Borrasi for taking more than $500,000 in kickbacks from Rock Creek, did not specify which nursing home operators Borrasi allegedly paid, and Borrasi declined to speak with the Tribune.
Abhin Singla, a member of Borrasi's medical group who was an unindicted co-conspirator and cooperated with federal agents to wear a wire, told authorities, "Esformes controls the flow of patients in and out of his nursing homes to ensure that he is receiving the maximum allowed benefit."
Singla alleged he was with Borrasi in March 2001 when Esformes called and told Borrasi to admit at least five nursing home patients to various hospitals. Borrasi quickly did so without asking about their conditions.
Borrasi told Singla "someone would find something wrong with the patients to justify the admissions," Singla said.
Singla told the Tribune he stepped forward to help the government because he was appalled by the "fraudulent use of public health care dollars and compromise to patient care."
Esformes, who operates nursing homes Florida as well as Illinois, issued a statement saying he "unequivocally denies being ... involved in any impropriety with Dr. Borrasi or others."
If federal agents did indeed trace payoffs made by Borrasi, "such monies never came to Philip Esformes," said Esformes' attorney, Michael Pasano. "Borrasi stands convicted," and the co-workers who quote him had no direct knowledge of any alleged payments and are biased and "lack credibility," Pasano said.
"The government had the statements you cite ... and still chose to take no action. Why? We submit that the prosecutors and agents knew the witnesses were neither believable or corroborated," Pasano said. Beyond that, "it is impossible to respond to specious and unfounded allegations other than to say they did not happen."
"You do not need to do anything wrong or cheat or play games with the system when you work harder than your competitors," Pasano said. Esformes "believes in hard work and quality care for his residents."
Esformes' father and business partner, Morris Esformes, said through his attorney there was "no evidence" that the Esformeses or their nursing homes gave or received kickbacks, and said the Esformeses were never investigated by authorities regarding the patient-brokering scheme.
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Chicago FBI Special Agent and spokesman Ross Rice said the bureau was unable to continue investigating Borrasi's 2000-2002 financial dealings with nursing home operators because, during the long and complex probe, the statute of limitations had expired. Federal prosecutors declined to comment.
Morris Esformes' attorney said doctors, not nursing home executives, decide where patients are placed. But former Rock Creek discharge planner and social worker Kimberly Reevas, who helped authorities unravel the scheme, told agents Philip Esformes was often at the hospital and was deeply involved with hospital staff in steering patients to his facilities.
At one meeting, Reevas said, Esformes explained to Rock Creek social workers the type of patients they should send to each of his nursing homes. According to Reevas, "Esformes further instructed the social workers to only send patients with public aid, public aid pending, disability, or Medicare."
The Esformeses in 2006 were part of a group of businessmen that paid the U.S. Justice Department $15.4 million to settle civil claims of kickbacks and health care fraud stemming from a Florida patient-brokering case. They deny wrongdoing and say they didn't contribute to the settlement.
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