June 28, 2017 / 8:39 PM / 2 months ago

Ex-WellCare general counsel pleads guilty in Florida Medicaid case

(Reuters) - An ex-general counsel of insurer WellCare Health Plans Inc (WCG.N) pleaded guilty on Wednesday in federal court in Tampa to having made a false statement to Florida's Medicaid program, prosecutors said, the latest former executive to be convicted in the case.

Thaddeus Bereday, indicted along with four other former WellCare executives in 2011, had been scheduled to face trial in September after not going on trial in 2013 with the other defendants for health reasons, prosecutors said.

Bereday, 52, faces a maximum of five years in prison.

"Due to his health issues, Mr. Bereday needed to conclude this matter after almost a decade," Sandy Weinberg, Bereday's lawyer, said in an email.

Bereday's plea came after the U.S. Supreme Court in April declined to hear an appeal by former WellCare Chief Executive Todd Farha of his fraud conviction for his role in a scheme to cheat the Medicaid health insurance program for the poor.

Prosecutors said Farha and others engaged in a scheme to file false Medicaid expense reports to Florida's healthcare administration overstating the amount the company's subsidiaries spent on mental health services for Medicaid patients.

Under a 2002 Florida law, companies were required to spend 80 percent of Medicaid dollars they received for mental health services, and return the difference if they spend less.

According to court papers, Tampa-based WellCare created a new unit to pay mental health care providers while retaining millions of dollars in Medicaid funds that should have been refunded.

A federal jury in 2013 convicted Farha, former WellCare Chief Financial Officer Paul Behrens, and former vice presidents William Kale and Peter Clay.

A federal judge in 2014 imposed prison terms of three years for Farha, two years for Behrens and one year for Kale. Clay was sentenced to five years of probation.

WellCare in 2009 agreed to pay $80 million and enter into a deferred prosecution agreement in connection with the investigation.

The case is U.S. v. Farha, et al, U.S. District Court, Middle District of Florida, No. 11-cr-115.

Reporting by Nate Raymond in New York; editing by Grant McCool and Tom Brown

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