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Wednesday, Aug 27, 2014
Crime & Courts

Appeals court rejects Wellcare plea for restitution


Published:

A federal appeals court Friday rejected arguments by WellCare Health Plans that the Tampa-based HMO should receive restitution from former executives who were convicted in a major Medicaid fraud case.

WellCare contended it was a victim of crimes committed by former Chief Executive Officer Todd Farha, former Chief Financial Officer Paul Behrens and former Vice President William Kale.

WellCare said in court documents that it “suffered hundreds of millions of dollars in losses,” including restating financial statements and defending against costly litigation, as part of a case that started in 2007 with FBI agents raiding company headquarters. But the 11th U.S. Circuit Court of Appeals on Friday agreed with a lower-court judge that WellCare was not entitled to seek restitution as a victim.

In part, the appeals court pointed to an earlier deferred-prosecution agreement in which it said the company admitted to being a co-conspirator.

“In short, WellCare is responsible for the acts of its top-level executives, and the company admitted to being a co-conspirator,’’ the opinion said. “It cannot now deny those undisputed facts. By asking for restitution from its top-level executives, WellCare seeks restitution for its own conduct --- something it cannot do.”

Farha, Behrens and Kale were sentenced last month to federal prison for their roles in the wrongdoing.

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