Bound for Bankruptcy

Stethoscope on 100 dollar bills symbolizing financial surveillance

Owning a successful business on paper does not always equate to successfully operating one. This is especially true for business owners whose best practices include participating in illegal financial schemes and defrauding the U.S. government.

Mississippi businessman Wade Walters pleaded guilty to participating in a healthcare fraud scheme that defrauded the government out of more than half a billion dollars. (Is it just me or does Wade Walters sound like an old school movie villain name?)

Walters owns 68 businesses in various states, many of which were indicated as participants in the billing fraud scheme. (With so many businesses, Walters was probably hoping the government would not catch up with his fraudulent practices.)

Walters was identified as one of the instrumental architects behind a scheme that defrauded TRICARE and other healthcare providers out of $510 million dollars. He is accused of being personally responsible for $290 million of the fraudulent billings. (Being an overachiever as a fraudster is one of the few times having ambition is frowned upon.)

This scheme involved other Mississippi businesses and medical professionals. (There’s never a shortage of fraudsters who want to get in on an illegal scheme.) Together, Walters and his conspirators created and prescribed expensive compound pain creams, vitamins, and weight loss pills that were medically unnecessary.

The pain creams were dosed with the controlled substance Ketamine to increase the price to between $11,000 and $14,000 per prescription. (Any medicine being that expensive in the first place should be a crime.) Refills were automatically sent to patients to make sure profits continued with regularity. Additionally, prescription pads for the formulas were filled out in advance and photocopied to increase the rate of prescriptions.

As part of a plea agreement with the U.S. Government, Walters pleaded guilty to one count of conspiracy to commit healthcare fraud and one count of conspiracy to commit money laundering. Over $30 million of his assets will also be seized as part of a forfeiture order. (Seems like a small price to pay in comparison the hundreds of millions he stole from the government.)  

Walters agreed to a plea agreement to avoid facing a six-week trial where he would have faced 37 fraud related charges. If he had been found guilty at trial, Walters could have faced a life sentence and up to $10 million in fines. (Sounds like Walters knows he got off easy.)

Sentencing will occur in October. Walter faces a maximum sentence of 20 years in prison and $500,000 in fines. Thirteen other individuals have pleaded guilty for their roles in this healthcare fraud scheme and additional cases are still pending for crimes related to this scheme.

Today’s Fraud of the Day comes from an article, “Hattiesburg businessman Wade Walters pleads guilty in Mississippi pain cream scheme,” published by MSN on July 9, 2020.

Hattiesburg businessman Wade Walters appeared in federal court Thursday afternoon to plead guilty for his role in a $510 million health care fraud scheme.

Walters, 53, pleaded guilty to one count each of conspiracy to commit health care fraud and conspiracy to commit money laundering at the William M. Colmer Federal Courthouse in Hattiesburg.

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Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.