Centene Corporation’s CEO, Michael Neidorff, has been sued for Racketeering Conspiracy and Slander in a lawsuit filed in the US District courts for over 1.1 billion dollars. The suit maintains that Michael Neidorff conspired to deliberately drive a mental healthcare services provider, Sovereign Health Group, out of business in 2018. Michael Neidorff and his associates are said to have maliciously targeted Sovereign’s CEO, Dr. Tonmoy Sharma. Full complaint document is available here > https://bit.ly/3dQtsD5
According to the damning lawsuit, Michael Neidorff and his associates made several false statements to lawmakers and federal agencies including the U.S. Securities and Exchange Commission and the FBI just to make sure that Sovereign is ruined and has to close down its operations. The allegations in the lawsuit also hints upon possible insider trading by Michael Neidorff who sold off over $20M of shares whilst in possession of non-public information, which is the financial losses and pending claims of its subsidiary Health Net.
Centene, in its statutory filings during the first half of 2016, specifically failed to mention that there were outstanding claims worth hundreds of million dollars on its subsidiary Health Net being pursued by Sovereign and several other providers thus hiding about 300 M Dollars liability from their balance sheet. Centene’s CEO Michael Neidorff and its Board of Directors failed in discharging their fiduciary duties and claimed a portion of that profit as their own personal compensation in cash and stocks.
The lawsuit states that the reason of the malicious campaign hatched against Sovereign Health Group was to discredit its valid claim that Centene hid its subsidiary Health Net’s true financial liabilities and losses and that its CEO Michael Neidorff lied to the company’s the Board of Directors and shareholders, and made factually incorrect statements in statutory filings and in the media about the Health Net’s pending claims liabilities to the tune of millions of dollars, which must have driven the prices of Centene Corporation’s shares in the stock market.
To hide his misdeeds and to safeguard himself from the apparent consequences, Michael Neidorff is said to have participated in the scheme that involved meetings with multiple law enforcement entities and regulatory agencies in an attempt to convince them to investigate Sovereign by concocting a bunch of false allegations against it without any proof. The scheme also involved reaching out to the District Attorney in Los Angeles and Orange County, and representations to the California Department of Insurance and the Regulators, all of whom saw through the web of lies and refused to act against Sovereign on their allegations.
Michael Neidorff and his team of nefarious schemers however succeeded in convincing the local office of the FBI and in June 2017, based on the false report by Defendants, more than 100 armed officers from the FBI, U.S. Department of Health and Human Services, IRS, DHCS, and several other agencies, simultaneously executed search warrants at six Sovereign locations across southern California and the home Dr. Tonmoy Sharma.
Michael Neidorff and his evil henchmen even involved a local journalist in their nefarious scheme and got the journalist to publish articles in local newspapers repeating Defendants’ false allegations. The bad press that ensued literally drove Sovereign to closure and is one of the reasons for the lawsuit.