Wade Walters sentenced to 18 years for role in medical insurance fraud scheme

Wade Walters sentenced to 18 years for role in medical insurance fraud scheme
Hattiesburg businessman Wade Walters was ordered Friday in federal court to pay $250,000 fine, $287.7 million in restitution..

HATTIESBURG, Miss. (WDAM) - A Hattiesburg businessman, who was characterized in United States District Court as the “kingpin” of a fraud scheme that cost medical insurers more than $510 million, was sentenced Friday morning to 18 years in prison.

United States Senior Judge Keith Starrett sentenced Wade Walters, 54, to 108-month prison terms on each of the two counts he plead guilty in a July plea bargain: conspiracy to commit health care fraud and conspiracy to commit money laundering.

Walters also was ordered to pay a $250,000 fine and restitution of $287.7 million.

He was taken into custody immediately following the proceeding.

The sentences, which were to run consecutively, were stiffer than the lower end of the range Walters could have received but less than the 120-month maximum the guidelines provided on each count.

Starrett explained his rationale for the sentence “varying upward.”

“This case is probably the largest fraud case ever tried in the state of Mississippi,” Starrett told Walters during sentencing at the William M. Colmer Federal Courthouse in downtown Hattiesburg.

“In addition to being a monumental, huge fraud, this fraud was orchestrated by your abilities. You were very much an integral part of this.”

“This” was a medical insurance scam that pocketed reimbursements for medications that in many cases were not needed or didn’t work. The main culprits were expensive, specially-compounded pain cream.

The scam took place from 2012 until January 2016 and severely impacted the health-care provider TRICARE, which oversees medical insurance to United States military veterans.

During his allocution, Walters objected to being characterized as the operation’s “kingpin,” saying the scheme was well underway before he got involved.

“My job was to promote the products,” Walters said. “My judgement got cloudy because I was trying to protect my investments.”

Friday’s sentencing skimmed over what Starrett called “a moving machine,” a sophisticated network that involved shell companies, overseas accounts and false documents.

“You were not just stealing money, but cheating on your taxes,” Starrett said. “You say you moved into this ‘gray’ area and ‘I kept doing it.’ Well, that concerned me.”

Walters originally was indicted on 37 counts in September 2019.

“To say Mr. Walters was not an undisputed participant or, as some have said, the undisputed kingpin, is preposterous.” Starrett said. “This was one of the most complex schemes I can imagine.

“It caused the fraud to be successful. It caused the money laundering to be successful.

Had Walters been found guilty on the charges in the original indictment, he could have faced multiple life sentences.

“The sentencing range that you could have faced couldn’t count that high,” Starrett said. “You got a significant plea bargain from the government that capped your sentence at 20 years.”

Starrett said the court had received more than 140 letters attesting to Walters’ character and good works, and eight testified Friday, including family members, friends and those who had dealt with him as a consultant on hospitals.

Walters apologized to his family and friends, as well as those who were hurt by the impact the fraud had on medical insurance providers’ clients.

The impact got dire enough that TRICARE had to cut back its offerings and ask the federal government for more money.

Walters said that after five years in the government’s crosshairs, he was ready to do his time.

“My life has turned upside down,” Walters said. “I’ve embarrassed my family, my friends and my church family.

“I’m tired. It’s been five years, and I’m ready to move on, to take my punishment.”

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