Accused wealthy fraudster's alleged parenting style: 'Money is king'

Family court records show Philip Esformes' alleged struggles over values

MIAMI – While he was under investigation for what the U.S. Department of Justice described as the largest health fraud case in U.S. history, Philip Esformes was also getting divorced.

Two out of of his three children are already in college, so the family conflict centered on their youngest son -- a 16-year-old Hebrew Academy student from Miami Beach.

On social media, the boy referred to Esformes, 47, as "the greatest dad in the world." But his mom, Sherri Tennenbaum-Esformes, claimed the father was exposing the boy to a lifestyle of "sex, drugs and rock and roll."

Esformes owned a network of skilled-nursing and assisted-living facilities in Miami-Dade County. He was a philanthropist with a lavish lifestyle that extended from Miami Beach to Los Angeles and Chicago. Now he stands accused in a plot to bill more than $1 billion to government programs meant to help the poor, aged, disabled and blind. 

Family court records showed scandalous allegations about the value system that might have led to his demise.

The 45-year-old mom described Escortes' parenting style was based on his belief that "money is king." She accused him of using his vast wealth -- reported at $78 million in 2014 -- to keep her son away from her by buying him off.

Tennenbaum-Esformes claimed a Miami Beach mansion designed for the boy to use as a gym and basketball training area became a bachelor pad, "contributing to the delinquency of a minor." A locker room area was converted into a bedroom, and she allegedly found condoms there.

Investigators in the Medicare and Medicaid fraud case said Esformes sometimes got kickbacks through payments for his son's basketball coach and escort services.

The federal government has since seized their North Bay Road estate, including the multimillion-dollar mansion with the basketball court, luxury cars, watches and millions in cash from the couple's shared bank accounts.

During his recent bail hearing in federal court in Miami, his attorneys, Marissel Delcalzo and Michael Pasano, of Carlton Fields, said Esformes is innocent.

They described him as a man who doesn't have a criminal record and who is dedicated to his religion and helped orphans. As a father, the attorneys said, he wouldn't flee the country and leave his family behind.

U.S. Magistrate Judge Edwin G. Torres didn't buy it. After the Aug. 3-4 hearing, Torres denied Esformes release on bail. 

Medicare Fraud Strike Force investigators and Tennenbaum-Esformes describe Esformes as unscrupulous.

Tennenbaum-Esformes' attorney, Andrew M. Leinoff, said in July that although Esformes was supportive of his son's love for basketball, he was otherwise "uninvolved in the minor child's academics, health and welfare."

Esformes encouraged the teen to exploit women and "texted, communicated and encouraged suggestions of inappropriate behavior," Leinoff said. Tennenbaum-Esformes claimed she was concerned about the values he was instilling in their son.

Prosecutors claimed Esformes not only stole resources meant to help the poor, but he also endangered patients' health at his facilities with unnecessary medical treatments. 

Although Esformes doesn't have a criminal record, this isn't the first time he has been accused of prioritizing profits over the best interest of patients.

He and his father, Rabbi Morris Esformes, of Chicago, who also owned nursing homes, have been a part of two civil court settlements.

In a 2006 case linked to Larkin Community Hospital in South Miami, there was a $15.4 million settlement over accusations of kickbacks paid to physicians for referrals. The other was a $5 million settlement related to a 2004 deal to replace their nursing homes' pharmacy providers with a pharmacy they sold to Omnicare, the nation's largest provider of pharmacy services to nursing homes.

They didn't admit to any wrongdoing in any of the cases. Prosecutors said they continued their criminal behavior after the settlements; they were just more careful.

With some of his alleged co-conspirators betraying him, Philip Esformes could face life in prison if found guilty of health care and wire fraud, kickbacks, money laundering and obstruction of justice.

"It's the husband's belief that because he is very successful, has a lot of money and makes a lot of money, that the rules do not apply to him," Leinoff said, according to family court records. 

Philip Esformes remained in a federal detention center Wednesday in downtown Miami.

The interagency Medicare Fraud Strike Force is said to have charged about 2,900 people accused of collectively billing Medicare for more than $10 billion in the past nine years. Medicare has been able to recoup between $1 to $1.5 billion through convictions and settlements, according to the Department of Health and Human Services' Office of the Inspector General.

About the Author:

The Emmy Award-winning journalist joined the Local 10 News team in 2013. She wrote for the Miami Herald for more than 9 years and won a Green Eyeshade Award.