Judge Rules that Long-Time Nursing Home Operators Will Face Trial for Kickbacks
On Friday, July 26th, an Illinois judge ruled that two nursing home operators will stand trial for allegedly accepting a kickback scheme. The kickbacks were brought to light after Omnicare Inc settled a whistleblower lawsuit.
Philip and Morris Esformes a father-and-son team, allegedly agreed to a kickback scheme when Omnicare bought out Total Pharmacy. Maureen Nehls, the plaintiff in the whistleblower lawsuit against Omnicare, claimed that when the company bought Total Pharmacy, it included a multimillion dollar kickback scheme to secure long-term pharmacy contracts with more than two dozen of the Esformes’ nursing homes. She also claimed that Philip Esformes, the son, paid $4,000 for a 40% stake in Total Pharmacy in 2002, which resulted in his earning $7 million when Omnicare bought the pharmacy out.
She further alleged that Morris Esformes, the father, solicited $800,000 in donations from Total Pharmacy for a religious school he built. Morris insists that the donations were not a kickback because he personally did not receive or use any of the money.
Two weeks ago, Omnicare agreed to pay $17.2 million to the government to settle its part in the whistleblower lawsuit.
Both Esformes deny any wrongdoing in the case.
Kickbacks and Defense of Federal Charges
Kickbacks refer to a form of negotiated bribery in which one returns part of the purchase price of an item to a buyer or buyer’s representative with the intent of inducing a purchase or improperly influencing purchases in the future.
Kickbacks are most commonly seen with health care services. Often, medical and pharmaceutical manufacturers are taken to court in whistleblower lawsuits alleging that the company paid vendors to use the company’s services exclusively. With health care services, providers may use self-referrals within large organizations. This is known as a Stark violation and can result in penalties.
Not all kickbacks are considered illegal. If a kickback does not specifically violate the federal or state law, the kickback may be considered normal, legal and tax deductible. Tax deductibility is prohibited by an official, employee of the federal government or an official or employee of a foreign government.
Federal Criminal Charges and Kickback Defense in South Carolina
Under the False Claims Act, kickbacks are a serious federal charge. If you face federal kickback charges, you may feel like you have no defense. However, you are not automatically guilty, and you still have rights under federal law.
Our federal criminal defense lawyers handle cases involving:
- Fraudulent insurance claims
- Bond issuances and investment schemes
- Falsifying loan applications
- Check fraud schemes
- Bribes or kickbacks
- False advertising or misrepresentation in sales transactions
If you or your company has been accused of kickbacks, a South Carolina federal criminal defense attorney at the Strom Law Firm, LLC can help. With long standing experience with both state and federal cases, we know what it takes to aggressively defend you. Call a South Carolina Criminal Defense Attorney at the Strom Law Firm today for a free consultation. 803.252.4800.
