Miami health exec paid $400,000 to charity at center of college admissions scandal, feds say

A Miami Beach businessman was so driven to get his son into the University of Pennsylvania that he not only paid about $300,000 in bribes to its basketball coach as a way in, but he also sent more than $400,000 to a charity at the center of a sprawling college admissions scandal, according to a government witness in the executive’s healthcare fraud trial.

Evidence of Philip Esformes’ payments to Key Worldwide Foundation, operated by college consultant William “Rick” Singer, surfaced during recent testimony at the businessman’s $1 billion Medicare fraud trial in Miami federal court.

Bank records analyzed by the government expert testifying in the Justice Department’s case show that Esformes sent more than $400,000 to Singer’s Key Worldwide Foundation — money derived from taxpayer-funded Medicare payments to the healthcare executive’s chain of skilled-nursing and assisted-living facilities in Miami-Dade County.

The online legal journal Law360 reported Esformes’ payments to Singer’s charity on Monday.

Federal prosecutors in the separate college admissions case say Singer used the charity to launder bribes from wealthy families, who are accused of making the illegal payments so their unqualified children could be accepted into elite universities in the Ivy League and elsewhere through a “side door,” such as athletic programs with lower academic standards.

Michael Petron, who specializes in financial and healthcare fraud investigations, testified at Esformes’ trial last week about the businessman’s payments to Key Worldwide Foundation after he first reached out to Singer in fall 2013. Esformes contacted Singer just months after he began paying a series of bribes to Penn’s head basketball coach, Jerome Allen, to give his son a coveted spot on its varsity team as a “recruited” player, according to court records and Allen’s testimony at Esformes’ trial.

To make the dream a reality, Esformes plied the coach with bribes — about $300,000 in cash and wire transfers, according to Allen’s testimony at the businessman’s healthcare fraud trial.

But Esformes wasn’t taking any chances on his son getting into Penn, court records show.

In October 2013, Esformes sent text messages to introduce himself to Singer, the head of the college consulting business at the center of the $25 million bribery and test-cheating investigation that was unveiled last week by federal authorities in Boston. Singer, coaches and parents, including a Miami real estate investor, were charged in the college admissions scandal, which ultimately did not implicate Esformes as a defendant. He has only been charged with bribing Allen as part of his Medicare fraud case, which was uncovered by the FBI in Miami and shared with their counterparts in Boston, according to law enforcement sources.

In his Medicare fraud trial, court records show that in February 2014 Esformes texted Singer to ask about his son’s chances of getting into Penn with a certain SAT score and whether he would have a better shot if he were applying as a student-athlete. The text messages were filed as evidence in Esformes’ Medicare fraud trial, just two days after the college admissions scandal broke last Tuesday.

Esformes told Singer that his son, Morris, a senior at Hebrew Academy in Miami Beach, scored 2000 out of 2400 on the three-part SAT exam — but he needed to take the college-entrance test again that March to boost his chances for Penn.

“Very good for starter,” Singer noted.

“2100 is what gets u in all?” Esformes asked.

“As a regular student 2200+,” Singer responded.

Then he added: “Athlete at least 700 across the board.”

Esformes texted that he would get back to the college consultant based in Newport Beach, California. It’s unclear how Esformes and Singer continued their discussions about the son’s bid to get into Penn, because the text messages filed in the court record revealed nothing more.

In the end, their interaction became a moot point. Allen, the Penn coach, followed through on his promise to put Esformes’ son on his short list of five “recruited” basketball players in exchange for bribes so that he could be accepted into the Ivy League university in the fall of 2015, according to Allen’s testimony at Esformes trial.

But by then, Allen had been fired for having string of lousy seasons. And, the son never made the team. Still, Morris Esformes is expected to graduate with the class of 2019 this spring, according to his father’s defense attorneys.

Allen pleaded guilty to a bribery-related money laundering charge in October and agreed to cooperate with federal authorities in Esformes’ healthcare fraud case and testify at his trial, which started in February.

During his testimony in Esformes’ healthcare fraud case last week, Allen talked about how difficult it was to get into Penn academically as a regular student or as an unknown student-athlete. He said it was less challenging for a high school standout with an average academic record hoping to play Division I basketball — especially if the coach designated the player as “recruited.”

“Your chances of getting in are far, far greater,” Allen testified at Esformes’ trial.

When Allen first checked out Esformes’ son at a basketball court in the JW Marriott in downtown Miami in late May 2013, he came away unimpressed, saying he was short and not terribly athletic.

“I didn’t see him as someone I would have recruited at that time,” Allen testified. “I didn’t think he was good.”

But Esformes persuaded Allen with a series of cash bribes and wire transfers to his bank account to lie to Penn’s admissions office about his son’s basketball qualifications so that he could be placed on the coach’s list with a handful of other eligible recruits — including a slot in the university’s exclusive Wharton School, Allen testified.

“He was going to give me money if I made sure his son was going to play Division I basketball and get him into the Wharton School,” Allen testified.

Esformes’ defense attorneys tried to portray the relationship between the healthcare executive and basketball coach as friendly, not transactional, between 2013 and 2015.

At Esformes’ trial, Petron, the financial witness for the government, also traced money transferred from Esformes’ business associates, Gabriel and Guillermo Delgado, to a different basketball coach hired by the healthcare executive to train his son in high school. Petron traced $1,870 in Medicare funds to a $3,500 check that the Delgado brothers paid to Martin Fox. Based in Texas, Fox coached Esformes’ son in basketball. Fox was arrested and charged last week with arranging several bribes in the college admissions scheme.

Petron also testified that the Delgado brothers, who pleaded guilty to Medicare fraud charges in connection with Esformes’ case, paid Fox a total of $114,000.

Before trial, Esformes’ lawyer denied any bribery scheme, saying his client’s son was qualified to get into Penn on his own academic and athletic merits. Defense attorney Howard Srebnick told the Miami Herald that Morris Esformes was a standout “A” student and basketball point guard at Hebrew Academy in Miami Beach.

Srebnick said Esformes hired Allen to help him improve his game, “as many parents do when their kids show athletic promise.” He added that Esformes’ son has maintained a nearly 3.6 GPA at Penn, made the Dean’s List and plans to graduate from the Wharton School with the class of 2019.