Three former executives from Tampa-based WellCare Health Plans are subject to a civil injunctive action from the U.S. Securities and Exchange Commission, according to a Tampa Bay Business Journal report.
The complaint names former CEO Todd Farha, former CFO Paul Behrens and former general counsel Thaddeus Bereday. The three men allegedly devised and executed a fraudulent scheme in which they held onto more than $40 million in healthcare premiums. WellCare was obligated to spend those premiums on other health services or reimburse state agencies.
Instead, WellCare allegedly recorded those retained premiums as revenue, which consequentially inflated net income and earnings in financial statements released to the public.
The SEC is seeking permanent injunctions and reimbursements. It also wants Mr. Farha and Mr. Behrens to pay back incentive-based pay and equity-based compensation, according to the report.
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