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Former Hospital Director Pleads Guilty for Her Role in an Alleged $1 Billion Health Fraud Scheme

On January 23, 2019, a former director of a Florida hospital pled guilty to one count of conspiring to defraud federal healthcare programs by paying and receiving kickbacks as part of an alleged $1 billion healthcare fraud.

The case, U.S. v. Esformes et al., is in the U.S. District Court for the Southern District of Florida, and the defendant is Odette Barcha. Sentencing is scheduled for April 3, 2019, and Ms. Barcha faces up to five years in prison, and a possible fine worth the greater of either $250,000 or twice the amount she obtained from the crime. As part of the plea deal, federal prosecutors dropped seven additional charges and agreed to seek a sentence at the lower end of the federal sentencing guidelines.

In 2016, federal prosecutors charged Barcha along with businessman Philip Esformes and physician assistant Arnaldo Carmouse for allegedly operating an approximately decade-long kickback scheme that defrauded Medicare and Medicaid while also exploiting patients who were addicted to drugs. Prosecutors also alleged that the three defendants successfully concealed their fraud via sophisticated money laundering techniques and by disguising kickbacks as charitable donations, payments to female escorts, and payments to Esformes’s son’s basketball coach.

Barcha’s guilty plea included admitting to her actions in using her position at Larkin Community Hospital to pay physicians in exchange for referrals. Barcha specifically admitted to receiving kickbacks from Esformes that she then partially kept and partially used to pay physicians in exchange for them discharging patients from the hospital and into nursing homes and assisted-living facilities operated by Esformes. Such patients either did not need or did not receive medically necessary services once admitted to one of Esformes’ 30 facilities. Although prosecutors dropped charges for obstruction of justice, Barcha also admitted to her role in creating sham medical directorship contracts in an attempt to conceal kickbacks from the federal grand jury.

On January 9, 2019, defendant Carmouze pled guilty to one charge of conspiracy to commit healthcare fraud for his role in the matter, and he is still awaiting sentencing. Esformes has not pled guilty and is scheduled to begin trial on February 11, 2019.