Pardon spree frees rogues gallery of health care crooks who stole billions

negron-150x150melgen-150x150bernadett-150x150President Trump’s term ended with a spree of executive clemency to health care crooks who ripped off taxpayers and harmed patients.

His last-minute actions infuriated advocates for health care reform and patient protection, as well as federal prosecutors. They were aghast by the inexplicable largess shown to Medicare and medical miscreants included in Trump’s last-minute, public pardons of 73 people and commutations for 70 others. 

The white collar crooks not only got get-out-of-jail-free cards from Trump, but also saw their debts to the government canceled to the tune of millions of dollars.

The president’s last-day actions came after he recently granted clemency for Chris Collins, a GOP congressman who insider-traded on Big Pharma information, and Philip Esformes, 52, a nursing home operator and perpetrator of what has been called one of the nation’s largest Medicare frauds.

Among those freed from the consequences of their federal crimes were:

  • Judith Negron, 49, who, the New York Times reported “had been convicted in a separate scheme to siphon off hundreds of millions of dollars in fraudulent Medicare payments.” Under a Trump commutation, she was released after serving eight years of a 35-year sentence and “was relieved of any remaining obligation to pay her share of $87 million in court-ordered restitution.” In her case, the newspaper said, “investigators found that the network of mental-health clinics she helped run, known as American Therapeutic Corp., paid bribes and kickbacks to owners of nursing homes and halfway houses and to so-called patient brokers to deliver clients to their clinics. In many cases, those clients were not eligible for the services that the company then billed Medicare to supposedly provide. [She] and others made sure that patient files and therapist notes were altered to make it falsely appear that patients were being treated, with Ms. Negron at times signing files as if she was in two places at once. In total, at least $83 million in improper Medicare payments were made to the companies over eight years. Only a tiny share of the money was located after arrests were made.”
  • Salomon E. Melgen, 66. The New York Times said he received a commutation of his remaining prison sentence for running “clinics in Florida that fraudulently diagnosed Medicare patients with eye diseases and then performed medically unnecessary tests and procedures, falsely billing the federal government at least $42 million, according to prosecutors. He was sentenced in 2018 to 17 years in prison and was not scheduled to be released from prison until 2031 … Roger H. Stefin, lead prosecutor on the Melgen case, said that he considered it to be the most important conviction of his nearly 32-year career at the Justice Department — and that he was outraged at what Mr. Trump did. Dr. Melgen’s case had become particularly high-profile because of his friendship with Sen. Bob Menendez, (D-N.J.), who was accused of bribery and corruption for accepting gifts from Dr. Melgen while intervening in his case with federal officials. Mr. Menendez’s trial ended with a deadlocked jury; a judge subsequently dismissed some of the charges and the Justice Department decided not to retry him.”

The independent Kaiser Health News service reported that “Prosecutors had accused Melgen of endangering patients with needless injections to treat macular degeneration and other unnecessary medical care, describing his actions as ‘truly horrific’ and ‘barbaric and inhumane’ … Melgen ‘not only defrauded the Medicare program of tens of millions of dollars, but he abused his patients — who were elderly, infirm, and often disabled — in the process’ … These treatments ‘involved sticking needles in their eyes, burning their retinas with a laser, and injecting dyes into their bloodstream.’ Prosecutors said the scheme raked in ‘a staggering amount of money.’ 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’ payments, prosecutors said.”

  • Faustino Bernadett, a former California anesthesiologist and hospital owner. He received a full pardon, KHN reported, noting: “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. ‘As a physician himself, defendant knew that exchanging thousands of dollars in kickbacks in return for spinal surgery services was illegal and unethical,’ prosecutors wrote. Many of the spinal surgery patients ‘were injured workers covered by workers’ compensation insurance. Those patient-victims were often blue-collar workers who were especially vulnerable as a result of their injuries, according to prosecutors.”
  • sweiss-150x150Sholam Weiss, (shown at left). KHN said he is reputed to have been “issued the longest sentence ever for a white-collar crime — 835 years. ‘Mr. 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,’ according to the White House.”
  • davis-141x150John Davis,  shown at right, the former CEO of Comprehensive Pain Specialists (CPS), the Tennessee-based chain of pain management clinics. He was pardoned, KHN said, after “he 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’s pardon statement cited support from country singer Luke Bryan, said to be a friend of Davis’. 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’ medical professionals stood among the nation’s top such Medicare billers.”

The convictions of several of these criminals resulted from long, difficult, and complex investigations, many “by a special unit created in Miami in 2007 and led by Paul E. Pelletier” and other expert federal prosecutors who had been tapped to target Medicare fraud, the New York Times reported, also quoting Wifredo A. Ferrer, a former U.S. attorney in South Florida.

“Mr. Pelletier and his colleagues said they were amazed at the depth of corruption they found. ‘We were ground zero for Medicare fraud,’ Mr. Ferrer said. There were so many schemes unfolding in South Florida that prosecutors set up an office with two football fields’ worth of space to store documents seized during raids and house the dozens of prosecutors, FBI agents, and personnel from the inspector general’s office at the Department of Health and Human Services assigned to the team. The team also included a nurse who could help them reverse-engineer falsified billing codes and data experts who could examine billing trends to help them identify surges in reimbursements that might merit further investigation. The program was eventually expanded to 14 other cities, including Los Angeles, New York, Houston, and Chicago.”

The president, however, did not consult about his clemency grants with the U.S. Justice Department — either in the formal office of the pardon attorney, officially tasked with assisting the president with such decisions, or with prosecutors involved in these outraging cases, or with experts in the field. Instead, as he made clear in a White House statement, what swayed him was an array of friends of criminals, as well as their politically connected and powerful contacts.

Pelletier told the newspaper this about the clemency actions:

“It is an incredible kick in the teeth to the agents and prosecutors who toil away every day under very difficult circumstances to achieve justice and some restitution to the taxpayers from the billions of dollars that has literally been stolen from them.”

Matthew Smith, executive director of the Coalition Against Insurance Fraud, told KHN:

“All of us are shaking our heads with these insurance fraud criminals just walking free.”

Commenting on the Esformes cases, Tim McCormack, a Maine lawyer who represented a whistleblower in a 2007 kickback case involving the nursing home operator, told KHN the cases involving health care personnel “are not just about stealing money.” He added of the convicted:

“This 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. These pardons send the message that if you are rich and connected and powerful enough, then you are above the law.”

In my practice, I see not only the harms that patients suffer while seeking medical services, but also their struggles to access and afford safe, efficient, and excellent health care. This has become an ordeal due to the skyrocketing cost, complexity, and uncertainty of treatments and prescription medications, too many of which turn out to be dangerous drugs.

At a time when the U.S. health care system has been exhausted by the coronavirus pandemic, we need to give it all the support we can — at the same time recognizing that it does, indeed, have challenges with three things that political partisans love to spotlight: waste, fraud, and abuse. Research shows that billions of dollars of inflated medical costs may be attributable not to outright criminality but to bumpf-loving administrative excesses in the health care system as well as uncontrolled prices and expenses and uncoordinated care. These are issues that desperately need addressing.

When prosecutors also build criminal cases, rigorously and well, involving health care scams, especially in taxpayer-supported programs, and they secure convictions that do not fall readily to public scrutiny or appellate reversal, well, that is not the place for politicians, and especially presidents to inject themselves without great care — and with undue weight to dubious advocacy for wrongdoers, right? What happened, it is necessary to ask the zealous GOP pardon-pitchers and the president himself, to all the onetime clamor for their tough-guy adage, Do the crime, do the time?

As the New York Times reported, Esformes, for example, was portrayed by the president and the criminals’ pals, as a religiously devout man, given to prayer, charity, declining health, and worries about impoverishment. Instead, a reporter found that he was giving a boisterous New Year’s Eve bash at his multimillion-dollar Miami home. Really?

Photos: Top, left to right, Faustino Bernadett (from his own blog),  Salomon Melgen,  WPTV video screen capture, Judith Negron, CBS Miami video screen capture.
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