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  • Elaine Silvestrini (Tampa Tribune March 25, 2016)

Man who cooperated with feds gets probation for WellCare fraud

TAMPA — Without Gregory West’s extraordinary cooperation, a federal prosecutor said, the government may never have succeeded in proving the extent of fraud perpetrated by executives at WellCare Health Plans in the state Medicaid program.

West immediately began talking to and working with federal investigators when the company was raided eight years ago, Assistant U.S. Attorney Jay Trezevant said Friday morning at West’s sentencing hearing.

“In almost 19 years on the federal bench,” U.S. District Judge Richard A. Lazzara said, “I’ve never seen an individual give such substantial assistance to the federal government. It would be a manifest injustice to incarcerate him,” especially since one of the convicted executives received probation.

So West, 58, was sentenced to three years of probation for participating in a scheme to defraud Medicaid, and Lazzara said he will consider ending the probation early if he meets certain conditions.

After all that talking with prosecutors, investigators and jurors, West said little at his sentencing hearing Friday morning, except to ask the judge to consider his decision to come clean before he even had a lawyer or any idea that he would have a plea agreement. “Actions,” West said, “speak louder than words.”

The defendant also told the judge he has only about $3,000 in the bank and is unable to pay a fine.

Defense lawyer Dale Sisco said in a court filing that West has been unable to secure a steady job since his termination by WellCare in 2008. He tried to start his own data analysis business, but was unable to get only “sporadic engagements,” Sisco wrote. West lost his home to foreclosure and has to sell almost everything he owned to support himself, according to the court filing.

Without credit for his cooperation, West was facing between 70 and 87 months in prison under federal sentencing guidelines.

Following a trial in which West was a key witness testifying 12 days on the stand for the prosecution, the former CEO of WellCare, Todd Farha, was sentenced in 2014 to three years in prison, less than called for under federal guidelines, because a judge recognized his lack of a criminal record and the ruination of his promising career. Two other former executives, Paul Behrens, who served as WellCare’s chief financial officer and William Kale, who was vice president of a WellCare subsidiary that was at the center of the fraud, each got lesser prison sentences. Behrens was handed a two-year prison sentence; Kale was sentenced to one year and a day. Farha was fined $50,000.

A fourth defendant, Peter Clay, was placed on five years of probation. Yet another defendant, Thaddeus M.S. Bereday, WellCare’s former general counsel, was severed from the trial because of his own medical issues. His case has been put on hold pending a ruling in codefendants’ appeal. Trezevant told Lazzara that West has agreed to see the entire case through to the end, and the prosecutor has confidence that West will testify against Bereday when required.

WellCare entered into an agreement with federal prosecutors in 2009 to pay $40 million in restitution, forfeit another $40 million and cooperate with the criminal investigation. The company complied with all of the requirements of the agreement and the criminal charges against it were later dismissed.

The company also settled a civil case with the government, paying an additional $137.5 million and entering into a binding “Corporate Integrity Agreement.” Moreover, WellCare agreed to pay a $10 million civil fine to the Securities and Exchange Commission.

According to authorities, two WellCare Florida-based HMOs, StayWell and Healthease, contracted with the state Agency for Health Care Administration, which administers the Medicaid program, to provide Florida Medicaid program recipients with services, including behavioral health.

A 2002 Florida law required Medicaid HMOs to spend 80 percent of the Medicaid premium for behavioral health services on providing those services. If the HMO spent less, the company was required under the law to return the difference to the state. To get around that, the defendants submitted inflated expense information in the company’s annual reports to AHCA.

Trezevant credited West for the successful case, saying the government never would have been able to accomplish as much as it did without him. The prosecutor said in a court filing that West’s role was “pivotal.”

The prosecutor said investigators approached West, a financial analyst at the company, the day before executing a search warrant at WellCare because they had been told that West “was trusted by executives to calculate all these different scenario” for committing fraud.

Trezevant said West taught him how the system worked, walking him in detail through all the details, meeting repeatedly with federal authorities.

Trezevant said West was scrupulously honest, and incapable of saying anything but the truth.

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