Fraud

Thanks to a whistleblower and the court that unsealed his complaint, we can now see what really goes on when a large corporation decides to defraud the government. Of course it really is defrauding all of us.

In this case, WellCare Health Plans, which was Florida’s largest Medicaid HMO contractor, played loose and fast with the rules. A complaint has been filed by former WellCare financial analyst, Sean J. Hellein, reports Health News Florida. His complaint has launched a federal investigation and the records have now been unsealed.

WellCare was found to dump hundreds of sick and terminally ill patients and newborns from its rolls to increase profits by millions. WellCare reportedly stole between $400 million and $600 million from Medicare and Medicaid program, in several states besides Florida. The company in the past has called its financial dealings “accounting errors.”

Hellein’s attorney, Barry Cohen of Tampa, persuaded U.S. District Court Judge James. S. Moody to unseal the records on Thursday, June, 24, after it was reported that WellCare was discussing settlements with the U.S. Attorney’s Office for $137.5 million. Apparently crime pays.

Florida’s Attorney General, Bill McCollum, a Republican running for governor, is calling for a full repayment plus damages.
Some other items attributed to WellCare include:

• Moving money between accounts to up the cost of healthcare in some cases paying for a treatment years in advance to make it look more costly that resulted in an increase in Medicaid premiums.
• Failing to reimburse overpayment errors to the tune of millions.
• Fraudulently putting additional expenses into the Healthy Kids program in Florida.
• WellCare cherry-picked the healthiest members dis-enrolling the sick. Eliminating a sick baby from coverage could save the company about $20,000. A terminally ill person saved the company more than $11,000.

One WellCare employee aware of the fraudulent activities, Gregory West, pled guilty in December 2007 but has still not been sentenced. Three company executives have not been charged. WellCare moved out of Duval and Broward counties last year. Before that almost a quarter of its membership was from Florida.

Florida has joined eight states all suing drugmaker Merck & Co alleging deceptive marketing of the recalled painkiller Vioxx.

The lawsuit claims that while Merck offered Vioxx to the Medicaid program it was hiding the drug’s adverse effects in direct violation of the state’s Deceptive and Unfair Trade Practices Act.

Florida’s Attorney General Bill McCollum says the state wants to be reimbursed for more than $80 million spent on health programs, such as Florida’s Medicaid program, which included Vioxx as an approved drug. He wants that money back plus interest and he seeks civil penalties of up to $10,000 per violation.

Vioxx was pulled from the market in 2004 after patients taking the drug for arthritis pain began having heart attacks and stroke. Merck says its own research showed the pill doubled the risk.

Merck’s promotional campaign convinced doctors and patients that the drug was safe and desirable, and McCollum says in a statement that “The company also allegedly tried to intimidate physicians and researchers who questioned the safety of Vioxx.”

Whitehouse Station, N.J.-based Merck said in a statement that Merck acted responsibly. “We intend to defend ourselves against the complaint,” said Ron Rogers. Merck has already agreed to settle about 50,000 claims for damage from Vioxx for $4.85 billion, all being handled out of a New Orleans District Court. At the present time the heart attack victims, or their survivors, are supposed to be receiving payments.

Florida joins Alaska, Louisiana, Michigan, Mississippi, Montana, New York, Texas, Utah and New York City which have all brought substantially similar complaints against Merck. #

A Florida man admits he is guilty of defrauding a mortgage company.

Robert Guest, 44, of Orlando pled guilty in Alabama to one felony count of conspiracy in the scheme that involved the purchase and reselling of more than 200 homes, many in Florida.

Altogether the fraud cost  Countrywide Loans about $2 million.

Here is how it would work.

Guest would buy a home in Alabama, Florida, or Tennessee. Generally they were homes with low value, but he would arrange to sell to an investor at an inflated price.  The investor gets a loan for 80 percent. 

Then Guest pays him back his 20 percent.  In this case the lender, Countrywide, was then providing a 100 percent loan.  In Florida, Guest purchased homes in Orange and Seminole counties. 

Guest could face five years in prison. He also has to pay restitution and a fine of a a quarter of a million dollars.