Former Humana exec admits taking kickbacks

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LOUISVILLE, Ky., Jan. 24 (UPI) -- A former Humana Inc. sales manager pleaded guilty in Kentucky Thursday to taking $2 million in kickbacks but his lawyer called the matter a victimless crime.

James Wenger Jr. was charged along with another former Humana sales manager, Glenn Fine of Louisville, Ky., with violating Kentucky commercial bribery law by setting up a deal with Shep Cutler, the chief executive officer of Cutler & Associates, an insurance brokerage in Columbia, S.C. Wenger and Fine were charged with a federal violation for doing so across state lines.

The two agreed to steer agents who would sell Humana insurance products to Cutler's company and his business partner, Don McNerney, The (Louisville) Courier-Journal reported Thursday. Wenger and Fine set up fictitious businesses and each received $2,089,475 from Cutler between 2006 and 2010.

As part of his guilty plea, Wenger agreed to pay $100,000 to Humana and to give up $900,000 in ill-gotten gains to the government. Fine's attorney, Scott Cox, said his client would likely plead guilty in February.

Wenger's lawyer, Robert Eckard, called the payments referral fees and said "there was no victim" since Humana "made a lot of money from the work of" Wenger and Fine.

Humana has said it was "a victim of Fine and Wenger's fraudulent conduct. They abused their positions at Humana to profit personally at the expense of the company."

Eckard said prosecutors had contended Humana's losses were limited to legal fees and the cost of investigating Wenger and Fine.

Assistant U.S. Attorney Lettricea Jefferson-Webb said Humana was the victim of a crime but declined to discuss the extent of the company's losses, the Courier-Journal said.

Cutler's lawyer, Guthrie True, said, the payments were not bribes or kickbacks.

The charges carry a possible sentence of five years in prison and a $250,000 fine. Judge Charles Simpson said he would hold off on sentencing Wenger because Wenger has been cooperating with the government.