Former Humana Inc. Employee Admits to Taking Kickbacks Totaling $2 Million in an Insurance Sales Bribery Scheme
|U.S. Attorney’s Office January 23, 2013|
LOUISVILLE, KY—Former Humana Inc. sales manager James E. Wenger pleaded guilty in United States District Court in Louisville, Kentucky, today to charges of racketeering and bribery in connection with his former position, announced David J. Hale, United States Attorney for the Western District of Kentucky.
Wenger, age 50, of Louisville, pleaded guilty to a single count federal information charging him with taking kickbacks totaling at least two million dollars while employed as part of Humana’s sales and marketing division known as the MarketPoint Organization.
According to the plea agreement, Wenger admits that in 2005, he, along with others, met at a hotel in Florida to discuss sending insurance agents to Shep Cutler, one of the larger Managing General Agencies (MGA), and Dan McNerney, one of his business partners and also a MGA. Wenger and co-defendant Glenn Fine, another Humana employee, agreed to send insurance agents who wanted to sell Humana Medicare Advantage and Prescription Drug Plan products to Cutler and McNerney in exchange for Cutler sending payments to Wenger and Fine. The four agreed to split the override fees, and each would receive payments of 25 percent. Fine and Wenger agreed to set up fictitious businesses accounts in their wives’ names. Wenger admitted he sent agents to Cutler and McNerney’s MGAs and acknowledged his wife did not provide any service in exchange for the money received from Cutler. Wenger was not authorized by Humana to enter into a kickback relationship with Cutler and McNerney. Wenger received approximately $2,000,000 for his participation in the scheme. As a result of this kickback arrangement, Humana suffered a loss to its business and had to pay legal and other investigative costs.
At sentencing, Wenger faces a combined maximum term of five years in prison, a combined maximum fine of $250,000, and a three year period of supervised release. Wenger may also be ordered to forfeit any and all property derived from the gross proceeds of the offenses for which he has pleaded guilty. Co-defendant Glenn Fine is scheduled to make an initial appearance on February 19, 2013, in U.S. District Court located in Louisville, Kentucky.
This case is being prosecuted by Assistant United States Attorney Lettricea Jefferson-Webb and is being investigated by the Federal Bureau of Investigation (FBI) and the Department of Health and Human Services-Office of Inspector General, with assistance from Humana Inc.