Friday, April 20, 2018
Business

After years, Tampa's WellCare still haunted by past CEO

One of Tampa Bay's best performing public companies remains haunted by the ghost of a past CEO whose alleged misdeeds just won't disappear.

The phantom is ex-WellCare Health Plans chief Todd Farha, ousted four years ago this month along with two other senior executives. They exited well compensated, just months after a high-profile FBI raid on WellCare's headquarters on Oct. 24, 2007.

The company provides managed care services to Medicaid and Medicare customers across the country.

Fast forward. Shares in WellCare roared up 74 percent last year, making it Tampa Bay's top stock performer among major public companies with headquarters here. No one else in the area even came close in 2011.

WellCare should be celebrating. Instead it's litigating.

On Monday, as current WellCare CEO Alec Cunningham prepared upbeat remarks for an annual J.P. Morgan health care conference, the U.S. Securities and Exchange Commission filed suit in U.S. District Court in Tampa against Farha, former chief financial officer Paul Behrens and former general counsel Thaddeus Bereday.

The SEC's tardy lawsuit — Farha and the other guys really are long gone from Wellcare — alleges insider trading and fraud.

The suit says the three "devised and carried out a fraudulent scheme" to deceive the Florida Agency for Health Care Administration, Florida Healthy Kids Corp., and WellCare investors by "improperly retaining over $40 million in health care premiums" that WellCare was supposed to reimburse to state agencies.

Instead, the suit says the executives used that $40 million to inflate corporate revenue and earnings. Then they sold $91 million in WellCare stock inflated by a market that thought the company was doing better than it was.

There's more to the lawsuit, but you get the drift.

On its own, this round of litigation is compelling. But it's built upon years of other lawsuits — brought by investors and even by WellCare itself — against Farha and his fellow execs.

Before all this, WellCare was politically connected. Its board included former Democratic Sen. Bob Graham as well as Ruben King-Shaw, who was once the No. 2 man at Medicare. WellCare also gave generously to Republican causes, with Farha contributing $100,000 to President George W. Bush's 2004 re-election campaign.

President Bush nominated Farha in 2006 to represent the public interest on the board of the Securities Investor Protection Corp. SIPC works with court-appointed trustees to help investors recover funds when brokerage firms fail.

In hindsight, Farha's SIPC appointment sounds more like a head-shaking plot from a Carl Hiaasen novel. What better person to protect investors from securities fraud?

Since then, Farha has laid low. His last picture in this newspaper in 2010 found him smiling at a Tampa Museum of Art gala. Behrens now calls himself a principal at the area firm Verdant Environmental Services, while Bereday heads a business consulting service called Newport Advisors in Tampa.

Given their abundance of legal woes, it looks like they'll be around to haunt poor WellCare for a good while yet.

Contact Robert Trigaux at [email protected]

Comments
Owners say new house is a disaster; developer accuses them of ‘online terrorism’

Owners say new house is a disaster; developer accuses them of ‘online terrorism’

ST. PETERSBURG --- Stretched across the front of Tim and Hyun Kims’ two-year-old house is a big banner with the name of a developer and the words: "I have to fix my new house."Some of what needs fixing is instantly apparent. The front steps are too ...
Updated: 22 minutes ago
Florida hits a milestone: More than 100,000 people are registered to use medical marijuana here

Florida hits a milestone: More than 100,000 people are registered to use medical marijuana here

Florida has hit a milestone of sorts as it slowly moves toward wider availability of medical marijuana.The number of patients in the state who are registered to use the substance has surpassed 100,000 for the first time, according to Florida Departme...
Updated: 2 hours ago
Q&A: Walmart leader chats about Florida stores, and the chain’s latest retail strategy

Q&A: Walmart leader chats about Florida stores, and the chain’s latest retail strategy

The Tampa Bay Times recently sat down with Walmart director of corporate communications Phillip Keene to chat about the retail giant’s latest retail strategies and how the company is winning over customers in a competitive market.Already, two of the ...
Updated: 5 hours ago
Judge: Foreclosure defense lawyer Mark Stopa violated numerous rules of conduct

Judge: Foreclosure defense lawyer Mark Stopa violated numerous rules of conduct

Tampa Bay foreclosure defense lawyer Mark Stopa has violated numerous rules of professional conduct and caused two clients to nearly lose their homes because he failed to tell them about settlement offers from their banks. In preliminary findings of ...
Updated: 5 hours ago
Florida unemployment at 3.9 percent for sixth straight month

Florida unemployment at 3.9 percent for sixth straight month

Florida continues to coast with relatively low unemployment and modest job gains. In March, for the sixth straight month, the state’s jobless rate was 3.9 percent. Florida added 13,800 jobs over the month.Tampa Bay’s unemployment rate was 3.6 percent...
Updated: 6 hours ago
SunTrust warns 1.5 million clients of potential data breach

SunTrust warns 1.5 million clients of potential data breach

Associated PressNEW YORK — SunTrust Banks Inc. says accounts for 1.5 million clients could be compromised following a potential data breach. The Atlanta bank says that it became aware of the potential theft by a former employee and that the investiga...
Updated: 7 hours ago
Spring break, hurricane relief boosted Tampa Bay hotels in March

Spring break, hurricane relief boosted Tampa Bay hotels in March

The Tampa Bay area’s hotel occupancy rate rose to 87.5 percent in March, the highest level in three years. The rise was fueled by spring break vacationers as well as insurance adjusters and hurricane cleanup crews flooding the state to restore it aft...
Published: 04/20/18
Here’s your first look at what will be Riverwalk Place, Tampa’s tallest tower

Here’s your first look at what will be Riverwalk Place, Tampa’s tallest tower

TAMPA — Developers on Thursday detailed plans for what they touted as the tallest building on Florida’s west coast, with condominiums priced in six and seven figures and a shimmering glass design they say would stand out in the skylines of New York, ...
Updated: 2 hours ago
St. Petersburg police remove disabled adults from ‘deplorable’ assisted living facilities

St. Petersburg police remove disabled adults from ‘deplorable’ assisted living facilities

ST. PETERSBURG — Beef jerky, mayonnaise and Altoids mints were the only edible things in view inside one of the houses. There was no running water. The refrigerator was empty. A bed sat on top of the deteriorating living room floor. Cigarette butts b...
Updated: 11 hours ago
Marriott Edition to bring five-star hotel ambitions to Water Street Tampa

Marriott Edition to bring five-star hotel ambitions to Water Street Tampa

TAMPA — At the Gramercy Park Hotel in New York City, hotelier Ian Schrager transformed a Jazz Age building with its own rich history into a destination offering even more heady experiences — extravagant, edgy and bohemian.In Tampa, Schrager will have...
Updated: 11 hours ago