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United States of America v. Thaddeus M.S. Bereday
Middle District of Florida Federal Courthouse - Tampa, Florida
Case Number: 8:11-cr-00115-JSM-MAP
Judge: James S. Moody
Court: United States District Court for the Middle District of Florida (Hillsborough County)
Plaintiff's Attorney: Jay G. Trezevant, Cherie L. Krigsman, John A. Michelich, and John Bowers.
Defendant's Attorney: Morris Weinberg, Keith Eggleton, Nathan Berman and Dale Richard Bish, Jack Fernandez, Lee Fugate, Marcos Hasbun for Thaddeus M.S. Bereday
Dan Moylan, Geoffrey Garinthere and Grge Kehoe for Wellcare Health Plans, Inc.
Description: Tampa, FL - Former Wellcare General Counsel Sentenced For False Statements To The Florida Medicaid Program
Thaddeus M.S. Bereday pleaded guilty on June 26, 2017.
A federal grand jury in the Middle District of Florida returned an indictment on March 2, 2011, charging five former WellCare Health Plans, Inc. (“WellCare”) executives (Todd S. Farha, Paul L. Behrens, William L. Kale, Peter E. Clay, and Bereday) with four counts of healthcare fraud, four counts of making false statements relating to healthcare matters, and conspiracy to commit those crimes and defraud the United States.In addition, Clay was charged with two counts of making false statements. The fraud counts alleged that Bereday and his co-defendants had executed and attempted to execute both a scheme to defraud the Florida Medicaid Program through Florida’s Agency for Health Care Administration (“AHCA”), and a scheme to obtain, by means of false and fraudulent pretenses and representations, money under the custody or control of the program.
WellCare operates health maintenance organizations (AHMOs@) in several states targeted to government-sponsored health care benefit programs like Medicaid. Two WellCare HMOs operating in Florida, StayWell and Healthease, contracted with the AHCA to provide Florida Medicaid Program recipients with an array of services, including behavioral health services.
In 2002, the State of Florida enacted a statute requiring Florida Medicaid HMOs to expend 80% of the Medicaid premiums paid for certain behavioral health services on the provision of those services. If the HMO expended less than 80% of the premiums, the difference was required to be returned to the AHCA. The defendants in this case falsely and fraudulently schemed to submit inflated expenditure information in the company=s annual reports to the AHCA in order to reduce the WellCare HMOs= contractual payback obligations for behavioral health care services.
A federal jury found Bereday’s co-defendants guilty on June 10, 2013. For their respective roles in the scheme, in May 2014, Judge Moody sentenced Farha to 36 months in prison; Behrens to 24 months’ imprisonment; and Kale to 1 year and 1 day in prison. Clay was sentenced to serve 5 years’ probation. The defendants appealed their convictions, which were all affirmed by the Eleventh Circuit in August 2016.
On May 5, 2009, the United States filed related charges in an Information and Deferred Prosecution Agreement ("DPA") against WellCare. Pursuant to that DPA, WellCare was required to pay $40 million in restitution, forfeit another $40 million to the United States, and cooperate with the government=s criminal investigation. The company complied with all of the requirements of the DPA. As a result, the Information was later dismissed by the Court following a government motion.
This case was investigated by U.S. Health and Human Services – Office of Inspector General and the Federal Bureau of Investigation, along with the Florida Medicaid Fraud Control Unit.
Outcome: U.S. District Judge James S. Moody, Jr. November 22, 2017 sentenced former WellCare General Counsel, Thaddeus M.S. Bereday (52, Tampa), to six months in federal prison, followed by a three-year term of supervised release that includes one year of home confinement, for making a false statement to the Florida Medicaid Program. The Court also ordered him to pay a $50,000 fine.