The former general counsel at Tampa-based insurer WellCare Health Plans Inc. has been sentenced to six months in federal prison for his role in a scheme to defraud the Florida Medicaid program.
Thaddeus Bereday, 52, was sentenced on Nov. 22 after pleading guilty in June to one count of making a false statement. He faced up to five years in prison when U.S. District Judge James Moody in Tampa sentenced him, but, thanks to his cooperative plea deal, the U.S. Department of Justice had said it would seek to lower the sentence at last week’s hearing.
A lawyer for Bereday, Jack Fernandez of Zuckerman Spaeder in Tampa, declined to comment.
Bereday is one of the latest examples of the federal government’s crackdown on health care fraud, including on professionals. He was indicted in March 2011 along with four other former WellCare executives for, according to the DOJ, submitting inflated expenditure information to the state agency that administers Medicaid and overstating how much the company’s subsidiaries spent on behavioral health services for Medicaid patients. The scheme lasted from 2003 until 2007, prosecutors said.
A Florida law enacted in 2002 requires companies to spend 80 percent of Medicaid dollars they receive for mental health treatment and, if they spend less, return the difference to the state.
As part of his plea, Bereday admitted that he, along with others, knowingly and willfully submitted, on behalf of one of WellCare’s subsidiaries, a false 2006 expense report to the Florida Medicaid program, according to the DOJ.
In addition to imprisonment, Bereday was ordered to pay a $50,000 fine and sentenced to three years of supervised release, one on house arrest, following his six-month prison term, according to court records. The judge recommended that Bereday serve his time at a medium-security prison in Butner, North Carolina, after he turns himself in on Jan. 3.
Bereday’s prison sentence is the lightest among his codefendants. Former WellCare received three years, while former chief financial officer Paul Behrens and former vice presidents William Kale and Peter Clay received two years, one year and five years of probation, respectively.
Bereday was scheduled to go to trial with his codefendants in 2013 but did not participate because of health-related issues, according to the DOJ.
Guilty verdicts were returned against the four ex-WellCare executives on fraud-related charges after a 13-week trial. They argued at the time 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.
Bereday joined WellCare in 2002 from Brobeck, Phleger & Harrison, where he was a partner, according to company filings. Before his stint at Brobeck, he was a partner at Morgan, Lewis & Bockius from 2000 to 2001.