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Guilty & Not Guilty Verdicts in Tampa Fraud Trial

After a two-and-a-half month trial and almost three weeks of deliberation, a federal jury in Tampa found four health care corporation executives guilty of charges of submitting fraudulent reports to the state Medicaid program. The execs were found not guilty of many other charges.

Former WellCare chief executive officer Todd S. Farha; former chief financial officer Paul L. Behrens and former vice president William Kale were each convicted on two counts of submitting fraudulent reports. The jury also found Behrens guilty on two other identical charges.

A fourth defendant, former vice president Peter E. Clay, was found guilty only on charges of making false statements to federal agents.

The jury found Farha not guilty on six other charges; Behrens not guilty on two charges; Kale not guilty on four charges and Clay not guilty on two charges. U.S. District Judge James S. Moody Jr. declared a mistrial on a host of other charges against the four men after the jury failed to reach verdicts on those counts.

Prosecutors can choose to retry the men on the mistried counts but have not yet announced whether they intend to do so.

According to the March 2011 indictment, WellCare took Medicaid money from Florida’s Agency for Health Care Administration with the understanding that if it did not use 80 percent of the funds set aside for behavioral health services, the difference was to be returned to the state. Prosecutors argued that WellCare executives conspired to inflate reports of what they actually spent to reduce the amount they had to return. They claim the scheme defrauded the government of about $30 million.

Defense attorneys contended the expenses were legitimate and that the state Agency for Health Care Administration knew all along about the arrangement but failed to give WellCare and other HMOs any guidance. They maintain that this was a contractual dispute, a civil matter not a criminal one.

The prosecutors’ case included testimony from Gregory West, a senior financial planner who testified he sent false information to the state at the direction of the defendants. West pleaded guilty to charges of conspiracy to commit Medicaid fraud in 2007 and agreed to cooperate with federal prosecutors in an effort to get a lighter punishment. Despite pleading guilty six years ago, he has not yet been sentenced.


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