The former general counsel at Tampa-based insurer WellCare Health Plans Inc. has pleaded guilty over his role in a scheme to defraud the Florida Medicaid program, the U.S. Department of Justice announced Wednesday.
Thaddeus Bereday pleaded guilty to one count of making a false statement and faces up to five years in prison when he is sentenced in federal court in Tampa. A date has not yet been scheduled.
According to the DOJ, Bereday, 52, was indicted in March 2011 along with four other ex-WellCare executives for submitting inflated expenditure information to the state agency that administers Medicaid, overstating how much the company's subsidiaries spent on behavioral health services for Medicaid patients. The scheme lasted from 2003 until 2007, the DOJ 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.
Two lawyers for Bereday did not respond to emailed requests for comment Wednesday afternoon.
Bereday was scheduled to go to trial with his codefendants in 2013, but the presiding judge granted an in-camera motion to sever Bereday, and then sealed the motion from public view. A news report at the time speculated the sever was due to "medical reasons" but did not cite a source. The DOJ, however, confirmed that information in the press release it issued Wednesday.
"Bereday did not participate in the 2013 trial due to health-related issues," the agency stated. "His case was scheduled to be tried in September of this year."
After the 13-week trial in 2013, guilty verdicts were returned against the four ex-WellCare executives on fraud-related charges. The four are former chief executive officer Todd Farha, former chief financial officer Paul Behrens and former vice presidents William Kale and Peter E. Clay. 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.
WellCare agreed to settle claims by the DOJ against it for $80 million, the agency said. The company was not charged under a deferred prosecution agreement it entered in 2009, the DOJ added.