Wade Walters sentenced to 18 years and must repay millions in massive MS pain cream scheme

Hattiesburg businessman Wade Walters was sentenced Friday to 18 years in prison for his role in an elaborate compounded pain cream scheme that bilked TRICARE and other health benefits providers of more than $510 million.

He appeared before U.S. Senior Judge Keith Starrett at William M. Colmer Federal Courthouse in Hattiesburg.

Walters during his allocution said he objected to being called the kingpin of what is most likely the state’s largest fraud case, saying he didn’t start the fraud but got involved once it had begun.

Wade Walters was sentenced to 18 years at the William M. Colmer Federal Courthouse in Hattiesburg, Miss., Friday, Jan. 15, 2021, for his part in a massive pain cream fraud scheme.

Starrett, however, disagreed and told Walters the fraud would never have gotten so big if it had not been for Walters’ involvement, “not nearly to the extent that it was.”

Judge: Fraud monumental, ‘and you started it’ 

“You organized and orchestrated the fraud by your management skills,” Starrett told Walters. “You involved so many people — good people. Maybe they would not have been involved if they hadn’t been recruited (by Walters).”

Walters, 54, also was ordered to pay $287.7 million in restitution and fined $250,000. Additionally, he has to forfeit more than $56.5 million in cash and other assets.

“You were not just stealing money, you were cheating on your taxes,” Starrett said. “It’s a big deal to me that this fraud continued until it was over ½ billion (dollars).”

Starrett reminded Walters his actions and the actions of others involved in the fraud caused TRICARE to cut some of its medical programs for veterans and their families. He said TRICARE had to ask the government for more money to keep the “bare bones” going.

“It was a monumental, a huge fraud — and you started it,” the judge said.

Walters’ forfeited properties are listed in two forfeiture orders, one file July 9 and the other filed Friday.

Click here to read the most recent preliminary forfeiture order.

Click here to read the initial preliminary forfeiture order.

One property, the family home in Hattiesburg’s Canebrake subdivision, was at first going to be forfeited, but the government is allowing Walters’ wife, Dorothy “Dolly” Walters to pay the government for its share of the equity in the home.

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Family members, friends testify in support of Wade Walters

Before Walters was sentenced, several family members and friends testified on his behalf, including his mother Lillie Hinton, daughter Alison Frame and friend Tommy Duff, a Hattiesburg billionaire.

Hinton said her son was a workaholic who was always tried to help his family, even as a child.

She said Walters, one of four sons, paid off her car after the death of her husband in 2003, “so I wouldn’t have to struggle with the house payments.”

“I had no idea he had so much wealth until it all came down,” Hinton said.

The courtroom and an adjoining courtroom were filled with Walters’ family and friends. His closest relatives sat on the front row, united behind their father, husband, son.

Those in the second courtroom were able to listen to proceedings by audio, as cameras are not allowed in federal courthouses and the courthouse is not adequately equipped for video streaming.

Frame, the Walters’ middle child, testified how Walters treated her as if she were a biological child even though she was 18 months old when she came into his life.

“It wasn’t a stepdad situation,” she said. “I felt so much love from him always.”

Duff, who has known Walters as a friend for more than 20 years, said he was “100% straight up.” He said Walters had a good character and was a faithful husband and loving father who also loved God and his church.

Walters was always volunteering for and donating to charities, Duff and others said at Friday’s hearing.

“You can’t discuss Wade without the word ‘generosity’,” Duff said. “He did it for everybody — even folks he didn’t know.”

Duff said he and Walters had a cordial social friendship but had never had any business relationship.

Others, like Cynthia Jones and Vic Scott, trustees for Franklin County Memorial Hospital, testified to how Walters’ business acumen helped turn the failing hospital around and make it the success it is today.

“Wade saved Franklin County Memorial Hospital,” Jones said. “It is successful because of the things he did there and the things he taught us.”

Both said Walters became a friend over the years and called him “honest” and “trustworthy.”

“He will always have a seat at our table,” Jones said.

Wade Walters was sentenced to 18 years at the William M. Colmer Federal Courthouse in Hattiesburg, Miss., Friday, Jan. 15, 2021, for his part in a massive pain cream fraud scheme.

Wade Walters apologizes, says he’s ready to ‘serve my time’

Walters pleaded guilty in July to one count each of conspiracy to commit health care fraud and conspiracy to commit money laundering. He was indicted in September 2019 in a 37-count indictment, which if convicted on all counts could have resulted in multiple life sentences.

“The guideline ranges don’t even count that high,” Starrett said. “You were given a significant advantage” with sentencing guidelines on the reduced charges.

Walters was able to make a plea agreement with the government in exchange for his testimony and cooperation in other related cases.

On Friday, Walters apologized for his actions, saying he didn’t really know what he was getting involved in until it was too late and his pride would not let him back out.

“By then the stakes were too high,” he said. “I thought I should get out of it. I regret that I didn’t see that right away.”

Following his apology to the court, he apologized to his family and friends for embarrassing them and causing them pain.

“I’m tired,” he said. “I’m ready to move on and serve my time.”

Walters was taken into custody immediately following the hearing to begin serving his sentence.

Starrett said he will recommend Walters for a residential drug and alcohol treatment program while in prison at the request of his attorney Joe Hollomon, although there has been no mention in open court of whether Walters is addicted to drugs or alcohol.

Contact Lici Beveridge at 601-584-3104 or lbeveridge@gannett.com. Follow her on Twitter @licibev or Facebook at facebook.com/licibeveridge.