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Thursday, Oct 30, 2014
Crime & Courts

Convicted former WellCare executives looking at stiff sentences

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TAMPA — When three former WellCare executives are sentenced for defrauding the government, their sentences will be enhanced because of a judge’s decision Tuesday to hold them accountable for stealing or trying to steal $10 million.

The executives were convicted of some charges last June following a 2 1⁄2-month trial. The prosecution maintained the men’s sentences should reflect their attempt to defraud the government of $28 million; defense lawyers argued the government miscalcuated and the figure should be offset by services provided by the Tampa-based insurance company.

U.S. District Judge James Moody ruled for the prosecution but said he would hold the executives accountable only for $10 million, which was the amount of fraud committed during the time period covered in the charges for which the executives were convicted.

The finding will have a bearing on the sentences received by the former executives but will not affect restitution. Wellcare already has paid the government $40 million in restitution and $40 million in forfeiture funds as part of a deferred criminal prosecution agreement. Additionally, the company settled a civil lawsuit by agreeing to pay the government $137.5 million for overbilling in Florida and Connecticut.

The sentencing date for the former executives has not yet been set.

Charged with multiple counts of medical fraud, conspiracy and making false statements were former WellCare Chief Executive Officer Todd Farha; Chief Financial Officer Paul Behrens; William Kale, vice president of Harmony Behavioral Health, a WellCare subsidiary; and Peter Clay, vice president of medical operations.

Farha was found guilty of two counts of health care fraud and acquitted of six other charges, including giving false statements.

Behrens also was found guilty of two counts of health care fraud and two counts of making false statements but was acquitted of other two other false statement charges. Kale was found guilty of two counts of health care fraud.

Clay was found guilty of two counts of making false statements. Moody said that since Clay was not convicted of fraud, he would not enhance Clay’s sentence on the issue of the amount of theft.

Before Moody imposes sentence, he will have to rule on other issues regarding possible enhancements, such as whether the defendants used a sophisticated scheme to defraud the goverhment. The maximum possible sentence Clay could receive is 10 years in federal prison; Farha and Kale could receive up to 20 years and Behrens could get up to 30 years.

Moody’s ruling Tuesday means Farha, Kale and Behrens’ sentencing guidelines, at the moment, would fall in a range of between 63 and 78 months in prison. Because Clay did not receive the enhancement, his current guidelines call for up to six months in prison, which is what the others would have faced without Moody’s ruling Tuesday.

WellCare deals exclusively with Medicare and Medicaid claims, and the government alleged that the executives produced false documents and formed Harmony Behavioral, described as a shell company, to inflate the costs for behavioral health-care services.

Defense attorneys disputed the allegations, saying all the business practices of WellCare under the executive staff were legitimate and within the law.

esilvestrini@tampatrib.com

813-259-7837

Twitter: @ElaineTBO

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