Skip to comments.Soros-related firm raided by FBI (updated)
Posted on 10/25/2007 12:25:00 PM PDT by Kaslin
WellCare Health Plans of Tampa, a firm which has made scads of money administering government health care, and huge profits for George Soros, who was once its largest shareholder, has been raided by the FBI and shuttered. The St. Petersburg Times reports:
The company, which went public in July 2004 at $17 a share, has had a meteoric rise, with its stock more than doubling in the past 12 months. On Wednesday, WellCare's shares dropped $6.77 or 5.5 percent, to $115.50 before trading was halted about 11 a.m. It ended the day down $7.10 at $115.17.
The company's largest stockholder is Soros Private Equity Investors LP, an investment fund indirectly controlled by Soros, a fierce critic of Bush.
WellCare regularly points out that Soros Private Equity Investors consists of institutional investors, such as state pension funds and insurance companies.
But filings with the Security and Exchange Commission note Soros indirectly "may be deemed to have voting and dispositive power" over the fund's WellCare shares.
(Excerpt) Read more at americanthinker.com ...
Hmmm... I wonder if WellCare execs and workers donated to Hillary in vast amounts...?
“I wonder if WellCare execs and workers donated to Hillary in vast amounts...?”
Do they know any Chinese dishwashers?
Whatever happened, he probably had already figured out how to make an obscene profit on it.
Nothing to see here folks. Its time to MoveOn. A simple case of buying low and selling high.
I sure they do Pop, but I know there’s a place where you can look at corporate and private donations to politicians....
Tampa/St. Pete ping...
Anyway, if it's dirty it happens in Tampa. With a company "administering" anything to do with "healthcare." Especially for "the government." With Soros behind it.
It smells like a rat a hundred times over but hey, grease can make even a coffin slide down the street, defy gravity, and cause everyone to lose his memory.
Sorry, they've all been replaced by Mexican dishwashers. LOL
Here are some of the Wellcare folks that contributed to Hillary:
LUTZ, FL 33558
WELLCARE HEALTH PLANS/MARKETING
TAMPA, FL 33613
WELLCARE/SR CLAIMS PROCESSOR
The folks at Wellcare are big contributors to politicians, both Democrats and Republicans. Thus, it seems they were trying to buy political favors from whereever it might come.
It is too bad Soros has already bailed out of Wellcare. It would have been fun to see him take a big hit today.
'May good things come from this!'
FBI raid shutters Medicare insurer
Probe of Tampa-based WellCare involves federal, state agencies
By KRIS HUNDLEY, Times Staff Writer
Published October 25, 2007
For the past two years, analysts have been asking how fast-growing WellCare Health Plans of Tampa has been able to make so much money running government health plans for the poor and elderly.
Now government investigators may be asking the same thing.
On a rainy Wednesday morning, more than 200 federal and state agents swarmed WellCare’s campus on Henderson Road in Tampa, forcing employees onto the sidewalk and into their cars.
Steven Meitzen, 51, who arrived at WellCare about 9:40 a.m. for a job interview, said he was initially told it was a bomb scare. “Later on, I talked to someone who said the FBI had a subpoena and were looking for records,” he said.
By midday, the complex’s parking garages were half-empty, but federal agents remained busy. They were still milling around WellCare’s buildings in the early evening; a Ryder truck was backed up to a loading dock.
The U.S. Attorney’s Office in Tampa said little about the search, which involved personnel from the Federal Bureau of Investigation, U.S. Department of Health and Human Services and the Florida attorney general’s Medicaid Fraud Control Unit. The search warrant is sealed.
Both federal and state officials, however, said that the investigation should have no impact on delivery of health care to the more than 2.3-million members of WellCare’s managed care plans.
The company’s customers are about evenly divided between Medicare and Medicaid plans. WellCare is the largest Medicaid provider in Florida, with more than 350,000 members. The company also offers Medicare Advantage plans to seniors in seven states and a stand-alone drug plan nationwide.
The timing of the raid could be detrimental as WellCare is in the midst of convincing seniors to sign up for its 2008 plans.
WellCare issued a release saying that it was cooperating with authorities and that essential services to members would remain uninterrupted. Though its customer service number was working Wednesday, WellCare’s Web site was replaced with a notice saying, “We’re sorry, but something went wrong. We’ve been notified about this issue and we’ll take a look at it shortly.”
The company, which went public in July 2004 at $17 a share, has had a meteoric rise, with its stock more than doubling in the past 12 months. On Wednesday, WellCare’s shares dropped $6.77 or 5.5 percent, to $115.50 before trading was halted about 11 a.m. It ended the day down $7.10 at $115.17.
FTN Midwest analyst Peter Costa downgraded his rating on WellCare stock to “sell” from “neutral” on Wednesday, citing the search. Costa said the investigation appeared to be a criminal one.
“Criminal investigations are harder to prove, likely to be more company specific and carry stiffer penalties, including being barred from doing business with the government if it is for fraud, which it most likely is given the departments involved,” Costa said in a research note.
Thomas Carroll, analyst with Stifel Nicolaus in Baltimore, called the raid “ominous” and downgraded WellCare shares to “sell” from “hold” in a note to clients. Contacts within the company said BlackBerries, computers and files were seized from corporate, marketing and human resources offices, according to Carroll.
Carroll suspects the raid is potentially the result of a lawsuit in which an employee brought a matter to the attention of authorities.
“When the FBI and HHS raid a health care company, the outlook on earnings, legal proceedings and the entire operations of the company can be questioned,” Carroll said.
WellCare’s business practices have come under increased criticism over the past several months. Last spring, the company said independent sales agents in Georgia enrolled dead people in Medicare plans. In May and June, WellCare representatives appeared along with other insurance executives at hearings in the Senate and House into aggressive Medicare marketing practices. WellCare and six other insurers subsequently agreed to a temporary halt in marketing one type of Medicare plan, while promising to initiate consumer safeguards. In August, however, Medicare cited WellCare once again for violating several provisions of its Medicare contract, including sales practices.
WellCare, which had earnings of $139.2-million in 2006, gets all of its nearly $4-billion in revenues from state or federal governments. Profits come from the difference between the amount received from the government and the amount spent on overhead and medical care for its members.
The company routinely has outperformed its competition; for the quarter ending in June, the company said just 80.8 percent of its revenue was spent on medical claims, down from 82.7 percent a year ago.
WellCare’s high margins have had analysts scratching their heads. In April, two Wall Street analysts said Florida in particular was too generous in its Medicaid reimbursement to WellCare. The analysts, with CIBC World Markets and Goldman Sachs & Co., were particularly critical of WellCare’s use of a subsidiary in the Cayman Islands for reinsurance, saying it allowed the company to shift money in the form of reinsurance premiums.
WellCare said its reinsurance arrangement had been approved by stateregulators and rejected claims it was overpaid.
Florida Medicaid payments were raised 7.5 percent in July, to an average of $215 per member per month. Cuts of about 1.5 percent could be on the way in January, however, if Gov. Charlie Crist approves recommendations made during the recent special legislative session.
Medicare reimbursements average about $800 per member per month and will increase 3.5 percent next year. Because the federal government wanted to encourage private insurers to offer Medicare plans, it pays about 12 percent more for seniors on private plans than it does for traditional Medicare.
WellCare was a slow-growing Florida company until 1992 when its owner, Dr. Kiran Patel, sold it to a New York investment group led by financier George Soros. The bankers hired Todd Farha, an aggressive Harvard MBA, to transform the company. Under his leadership, WellCare’s earnings have increased eight-fold and the company’s investors and executives like Farha have profited handsomely from appreciation in its stock.
In an interview last year, Farha credited WellCare’s success with hard work, attractive member benefits and close attention to the basics. But he has also nurtured the kinds of relationships invaluable to a company dependent on government funding.
WellCare and its affiliates have given the Republican Party of Florida some $105,000 in contributions this year, according to state election records. They’ve also given the Florida Democratic Party $5,000 this year. In 2006, WellCare’s PAC gave $66,000 to federal candidates, all Republicans.
And the company’s board has included the head of the Florida agency that oversees Medicaid, Dr. Andrew Agwunobi. Agwunobi was a director for six months before being picked to head the Agency for Health Care Administration. For his six months service on WellCare’s board, Agwunobi received stock, which he sold for more than $1-million.
Current WellCare board members include former Florida Sen. Bob Graham and Ruben King-Shaw, former head of Florida’s health agency and an ex-deputy chief at Medicare.
Times staff writers Bill Coats, Kevin Graham, Shirl Kennedy and Jennifer Liberto contributed to this report, which also used information from wires. Kris Hundley can be reached at email@example.com.
What if I’m a WellCare member?
Government and company officials said there should be no disruption of services to members.
What if I want to change plans?
Open enrollment for 2008 Medicare plans begins Nov. 15. Medicaid recipients can check with their local social service office to get details on how to switch their insurer.
WellCare Health Plans Inc.
We have a mini neighborhood watch with our closest neighbors when the other family is on vacation. Part of our caring/watching is a gross sorting of mail when the other family is gone. That way the returning family doesn’t have to wade through a foot of mail to get to potential important mail on their return.
The man of the house, next door, is a retired MD with involvement in MD insurance programs. He received a couple of first class envelopes from WellCare, and I came home and ran off a couple of articles on my printer and attached them to the WellCare envelopes. It will be interesting to hear their comments after they return.