Jerome Allen admits Miami Beach businessman paid him bribes to get son into Penn

MIAMI — A former head basketball coach at the University of Pennsylvania who is now with the Boston Celtics testified Friday that he was paid hundreds of thousands of dollars in bribes by a Miami Beach executive standing trial for Medicare fraud so that the wealthy businessman’s son could get into the Ivy League school.

Jerome Allen, who pleaded guilty in October to a bribery-related money-laundering charge, testified as a government witness that healthcare executive Philip Esformes paid him bribes in cash and later through wire transfers so his son, Morris, could qualify as a “recruited” basketball player to help him gain acceptance to Penn and its exclusive Wharton School.

“I accepted the money to help Morris Esformes get into the school,” Allen testified during the father’s Medicare fraud trial in Miami federal court. “I got his son into Penn; I got his son into Wharton. None of that would have happened without me.”

Allen said that the son was not qualified to play varsity basketball at Penn and make his short list of eligible players. He said he lied to the prestigious university about the son’s qualifications and put him on that list because he had been bribed by Esformes during a series of trips to Miami in 2013. He testified that the father gave him $10,000 in cash each time, the money tucked into a brown envelope stuffed inside a plastic bag, during their meetings in the lobby of the Fontainebleau Hotel.

“I lied” to the school’s admissions office, Allen told federal prosecutor Allan Medina on direct examination. “I knew that if it got back to the University of Pennsylvania what I was doing for Morris Esformes, I would be fired.”

In total, Esformes paid Allen about $75,000 in cash bribes and an additional $220,000 in wire transfers into the coach’s bank account between 2013 and 2015.

Allen, who once played at Penn and as a journeyman guard in the NBA, was convicted of accepting bribes, luxury hotel stays, jet travel and limo transportation from Esformes. He is charged with making the illegal payments and is also the main defendant in a massive Medicare fraud case.

Three years ago, Esformes was charged with masterminding the nation’s biggest Medicare fraud racket totaling $1 billion and began trial as the sole remaining defendant in mid-February. As part of that, he was charged anew in July in the bribery case. Although the son was admitted to the university, he never made the basketball team.

Allen was fired as the Penn head basketball coach in March 2015 after a series of losing seasons and was hired as an assistant by the Boston Celtics. He served a two-week suspension from the team for his conviction on the bribery-related charges and must pay a $202,000 fine and an $18,000 forfeiture judgment to the U.S. government. He has not been sentenced yet.

Esformes, the healthcare executive, is accused of paying the coach so that Allen would designate his son as a “recruited basketball player” to support his application to Penn in 2014. Esformes came to know Allen through a basketball trainer, Michael Penberthy, who was coaching the executive’s son as a teenager. Penberthy had played basketball with Allen in a European league.

Esformes arranged for a limousine to pick up the coach at the swank Fontainebleau in Miami Beach and bring him to the JW Marriott Marquis in downtown Miami to watch his son play to assess his basketball skills in March 2013. Esformes also arranged for the limo to bring the coach to his home on North Bay Road in Miami Beach, where he has a regulation basketball court behind a second home that he owns next door.

During his testimony Friday, Allen said that even though he was not impressed with the son’s caliber of play, the coach fell for Esformes’ pitch that he would take care of the coach if he helped ensure his son could play basketball at Penn and get into its Wharton School. “He said to me, ‘we would be family for life,’ “ Allen testified, pointing out that it was Esformes who decided on how much to pay him.

Esformes picked up Allen’s series of tabs at the Fontainebleau Hotel totaling thousands of dollars, according to evidence presented in court. Esformes also paid $19,549.56 for a jet to fly him, his son and the coach from Philadelphia to Miami in March 2015.

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 when his son was a sophomore in high school 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.

During Friday’s testimony, another defense attorney, Bradley Horenstein, tried to establish through cross-examination that the relationship between Esformes and Allen became friendly, with the two families spending time together.

Allen, however, reminded the defense attorney of how the relationship started — with a cash bribe. “Everything started with this transaction, and it grew from there,” Allen testified.

The federal bribery charge against Esformes marked the second time that he had been accused of paying bribes.

Esformes, 50, who is being held without bond at the Miami Federal Detention Center, was previously charged with paying a state regulator $100,000 in bribes for tipping him off to on-site inspections and patient complaints at his network of skilled-nursing and assisted-living facilities in South Florida.