Feds sue ex-officer at UCI

COLUMBIA — Federal regulators this week sued a former executive of Columbia-based UCI Medical Affiliates, manager of Doctors Care medical clinics, over the embezzlement of $2.97 million.

Jerry Wells Jr., 47, was fired in December as the company's chief financial officer and executive vice president after an internal audit uncovered a scam dating back to 2003, according to court documents.

On June 24 Wells agreed to waive indictment and pleaded guilty to eight counts of making false statements on the company's financial reports filed with the Securities and Exchange Commission.

He awaits sentencing in U.S. District Court, according to a spokesman for the U.S. Attorney's office. Wells, of Columbia, faces a maximum sentence up to 40 years in prison and could be fined up to $2 million.

Wells also has agreed to repay the company he had worked for since 1995, according to court documents.

In their lawsuit, SEC attorneys charged that Wells stole the money by:

--Using his corporate credit card for personal expenses;

--Preparing false expense reports and submitting them for reimbursement;

--Submitting check requests for nonbusiness expenses, including construction work on his homes in Columbia and on Fripp Island.

Wells wrote off about $1 million of the stolen money in expenses on the company's balance sheet, UCI said in a statement.

"To justify ... some of these expenses, Mr. Wells altered invoices from contractors performing work on his personal residences to indicate that the work was for one of the company's facilities, and provided fraudulent work descriptions on the related check requests" the statement said.

Wells then signed forms submitted by the company to the SEC, misrepresenting UCI's financial statements, according to court records.

As a result the company is in the process of reauditing its books and has delayed filing an annual report for 2008.

Efforts to reach Wells and his attorney were unsuccessful Wednesday.

The scam was discovered Dec. 10 and reported immediately to the company's audit board, said Joseph Boyle, who replaced Wells as UCI's chief financial officer. By Dec. 17 Wells was fired, and UCI notified the SEC and Justice Department, Boyle said.

"We want to be transparent about it and do everything we can," he said.

Alex Rue, senior trial counsel for the SEC's Atlanta office, said the lawsuit filed this week seeks to prevent Wells from ever working again as an officer in a publicly traded company.

"Presumably Mr. Wells is going to get out of jail," Rue said. "He broke the law so he needs to be (prevented) from doing it again. If he again violates the law, he would be held in contempt and put back in jail."

Rue handled the government's case against Al Parish, the former Charleston Southern University economist who is serving a 24-year prison sentence for swindling investors out of $66 million in a Ponzi scheme.

Because of the lengthy investigation, UCI still is working on its 2008 annual report, Boyle said.

No date for the report's release has been announced.