Carlos de Cespedes, 58, and Jorge de Cespedes, 55, founders of Pharmed Group Corp., are to be sentenced

Carlos de Cespedes, 58, and Jorge de Cespedes, 55, founders of Pharmed Group Corp., are to be sentenced with four co-defendants after hearings today and Tuesday in Miami federal court.Prosecutors are seeking roughly eight-year prison terms for the brothers, who built their South Florida medical supply firm into one of the country's largest Hispanic-owned businesses before it collapsed in 2007.As part of their guilty pleas, the men admitted cheating on their taxes from 2001 to 2003 and taking part in a scheme to bill Kendall Regional Medical Center for $5.4 million worth of surgical supplies that Pharmed never delivered. It has been a spectacular fall from grace for two men once regarded as pillars of South Florida's business and Cuban-American communities. At the height of their success, the brothers, who lived in Miami-Dade and Brow- ard counties, gave generously to charitable causes, hospitals and educational institutions. Until June, the Pharmed name adorned the athletic arena at Florida International University — a tribute to a $1 million donation from the de Cespedes brothers in 2004.Federal prosecutors contend those acts of generosity make the men no less culpable and that treating them leniently would be unfair to poorer defendants."The de Cespedes brothers donated millions, but they also stole millions, thereby leaving some doubt as to who really funded their charities," the prosecutors stated in a sentencing memo. Under federal sentencing guidelines calculated by the government, the men face eight to 10 years in prison. However, judges can impose harsher or lesser sentences based on other factors.
Lawyers for the brothers are urging U.S. District Judge Patricia Seitz to consider "the whole story about who Jorge and Carlos de Cespedes really are" and limit their prison terms to four years or less.The attorneys have submitted dozens of letters describing kind acts by their clients, such as paying funeral expenses for an employee's father, personally wrapping gifts for the Toys for Tots program, and funding scholarships for needy students. Seitz also will hear from lawyers representing Kendall Regional in southwestern Miami-Dade County. They say the brothers should not be rewarded for being generous while they were cheating the hospital. To date, the men have not repaid "one penny" they stole, the hospital's lawyers charge."Health care fraud drives up the costs of providing medical services to the people of this community and harms every consumer," the lawyers stated.
According to court records, employees of Kendall Regional manipulated the hospital's computerized accounts to generate phony purchase orders for Pharmed supplies, then falsely reported the orders had been filled. Jorge and Carlos de Cespedes pocketed about half of the illicit proceeds.Three former hospital workers and a onetime Pharmed employee who pleaded guilty to being part of the false billing practice also face sentencing. A separate tax investigation by the Internal Revenue Service found the brothers secretly siphoned roughly $22 million from Pharmed into private accounts, resulting in unpaid taxes of more than $4 million.The brothers founded Pharmed in 1980 and once did business with most of South Florida's biggest hospitals. However, the company lost a significant contract with Johnson & Johnson and filed for bankruptcy in 2007, citing debts of more than $72 million.