The final and most public phase of a complex Medicaid fraud case at WellCare Health Plans Inc. began in March with the criminal indictment of five top executives, including Thaddeus M.S. Bereday, the company's former general counsel.
The scandal came to light in October 2007, when the FBI and Florida state investigators raided WellCare's Tampa offices. In 2009, the company agreed to pay $80 million to avoid criminal prosecution. It also pledged to work with investigators in the criminal case against the executives, including the former CEO and CFO.
The alleged scheme could give rise to a broad spectrum of charges. Prosecutors have chosen to focus, however, on good old-fashioned conspiracy.
"Prosecutors in a case as complicated as this have a number of statutes that they could pursue, and generally they do make choices," says John West, a white-collar defense partner at Troutman Sanders.
In this case, however, it looks like the government already has its star witness. Gregory West--a former WellCare executive who reported to Peter Clay, one of the defendants--pleaded guilty to defrauding the state of $20 million just two months after the 2007 raid (the plea remained sealed for almost a year). Presumably, West--whose sentencing has been postponed several times--has been working with prosecutors to build the case against his superiors.
If a general counsel doesn't have the option to flip, don't look for the government to pull any punches. Some experts feel that prosecutors actually hold corporate attorneys to a higher standard because of the special responsibilities and obligations they are expected to perform in the gatekeeper function.