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Soros-backed Medicare insurer raided by FBI

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By Michelle Malkin  •  October 25, 2007 10:36 AM

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Photoshop via Van Helsing

The St. Petersburg Times reports on an FBI raid of WellCare, a shady Medicare insurer…initially funded by far Left billionaire George Soros and run by one of his acolytes:

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.

Wellcare serves Medicare and Medicaid customers–more than 350,000 seniors in Florida alone. The stock fell yesterday on news of the raid. Seems stories have been floating around for a while about the company enrolling dead people and such:

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.

WellCare’s PAC has donated considerable money to Republicans. But the company took off with a generous helping hand from George Soros:

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.

Soros Private Equity Investors had owned about 80 percent of WellCare at the time of its IPO. “In December [2004], Soros Private Equity Investors sold 5.6 million shares for about $170 million. In April [2005], Soros spun off the $1.3-billion private equity group and the new firm was renamed TowerBrook Capital Partners. TowerBrook is headed by Neal Moszkowski, who previously led Soros Private Equity. Moszkowski also is chairman of the WellCare board.”

Also on the board of directors: former Democrat U.S. senator and Florida governor Bob Graham.

Jacob Goldstein at the WSJ Health Blog notes:

The company has done well for itself. As the WSJ reported, George Soros was the largest investor in a private equity fund that cashed out of WellCare in August of ‘06, bringing in a total of $870 million for an investment that originally cost $220 million.

WellCare, which says it provides managed care to 2.3 million Medicare and Medicaid patients, hasn’t been accused of any crimes in connection with this morning’s raids. Nevertheless, the Health Blog can’t help but be reminded of Florida’s remarkably robust health-care fraud industry. Our previous posts on that subject include billing for “clinically unbelievable dosages” of drugs, and a Rolls Royce purchased with ill gotten gains.

Welcome to George Soros’s America?

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