Thaddeus Bereday, the former general counsel of Tampa-based WellCare Health Plans Inc., has been mysteriously severed from the criminal trial of fellow executives accused of defrauding Medicaid. And no one is saying why.
The trial began February 25 against Bereday’s four co-defendants in U.S. District Court in Tampa. But a few days earlier U.S. District Judge James Moody Jr. had granted an in-camera motion to sever Bereday, and then sealed the motion from public view.
"A trial date for Defendant Bereday will be set by separate notice at a later date still to be determined," Moody’s order said. "The Court finds that the ends of justice served by taking such action outweigh the best interest of the public and the defendant in a speedy trial."
Lawyers for Bereday, the other defendants, WellCare, the state, and the U.S. Justice Department either didn’t return messages or declined to comment on why Bereday will be tried separately.
One newspaper report said Bereday was severed for "medical reasons," but didn't cite a source.
The judge set a status conference hearing for Bereday on June 13. The trial of the four co-defendants is expected to be completed by the end of May.
The four are former chief executive officer Todd Farha, chief financial officer Paul Behrens, vice president of medical economics Peter Clay, and William Kale, vice president of a WellCare subsidiary allegedly used in the fraud.
Last year WellCare, which is under new management, agreed to settle claims by the U.S. Department of Justice against it for $137.5 million. The company was not charged.
All five defendants are charged with conspiracy to commit health care fraud, multiple counts of health care fraud, and making false statements relating to health care matters. They face up to 10 years in prison for each health care fraud count, and up to five years for the other charges.
The defendants have pleaded not guilty. They argue that they were confused and were just trying to cope with a lack of guidance from state bureaucrats from whom they couldn’t get straight answers. They say the matter is a civil disagreement that doesn’t belong in criminal court.
But the government contends that the executives failed to return some $30 million or more that should have been sent back to the state to care for poor children and families.
On March 7, a former employee who has already pleaded guilty and is cooperating with the prosecutors, testified about how the top executives orchestrated the plan to keep the money. His testimony is to continue the week of March 11, according to the Tampa Bay Times.
Asked why he agreed to plead guilty, the employee said he wanted "to tell the truth no matter what ... and let the chips fall as they may," according to the Times story. He then added he wanted "to reduce how many chips fall on me."
