Next National Century trials set to begin
DUBLIN, Ohio (UPI) -- The next trial in the National Century Financial Enterprise fraud case is to begin this week in federal court in Ohio, it was reported Sunday.
The Columbus (Ohio) Dispatch reported Natural Century co-founders, Rebecca S. Parrett and Donald H. Ayers, will be on trial in Columbus starting Monday, along with former executives Randolph H. Speer, Roger S. Faulkenberry and James E. Dierker.
The five executives are all facing fraud charges in relation to the more than $1.9 billion National Century investors lost when the healthcare finance company officially declared bankruptcy in 2002.
The bankruptcy filing by the privately held company caused thousands of people to lose their jobs and helped cause the collapse of at least 275 healthcare companies.
The National Century officials have been accused of charges ranging from money laundering to conspiracy. All of the co-defendants, except Dierker, could receive life prison sentences if convicted. The Dispatch said Dierker is facing a maximum sentence of 25 years in prison if convicted.
Three more trials involving other National Century defendants are scheduled throughout the year.
Copyright 2008 by United Press International
Thursday, February 28, 2008
Why James Happ gets his own SEPARATE TRIAL! Really?
Business First of Columbus - Business First
Friday, February 8, 2008
Poulsen isn't the only National Century executive scheduled for a trial apart from the five now in court. James Happ is scheduled for trial in October because he wasn't charged in connection with the company's failure until last May.
Pay close attention to : Columbia Homecare Group, Inc.,; Med Diversified; Olsten of Columbus, Inc.,
Resource: Med Diversified Inc.
Previously, he served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc. It is alos noted that it was Mr. Happ's responsibility to divest Columbia Homecare Group, Inc. Well, take a guess, who financed the divestiture? Yes, NCFE. The company Happ went to work for. Stay tuned!!
Prior to joining Med Diversified, James Happ served as executive vice president of National Century Financial Enterprises ("NCFE"), a health care financing company and the primary lender of Med Diversified. In his three years in this role, he restructured the Servicer department to improve operational performance and accelerated the utilization of technology to increase operational
Med Diversified Strengthens Management Team; Names James K. Happ President.
Publication: Business Wire
Date: Wednesday, October 16 2002
Company: Med Diversified Inc.
Location: United States
Friday, February 8, 2008
Poulsen isn't the only National Century executive scheduled for a trial apart from the five now in court. James Happ is scheduled for trial in October because he wasn't charged in connection with the company's failure until last May.
Pay close attention to : Columbia Homecare Group, Inc.,; Med Diversified; Olsten of Columbus, Inc.,
Resource: Med Diversified Inc.
Previously, he served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc. It is alos noted that it was Mr. Happ's responsibility to divest Columbia Homecare Group, Inc. Well, take a guess, who financed the divestiture? Yes, NCFE. The company Happ went to work for. Stay tuned!!
Prior to joining Med Diversified, James Happ served as executive vice president of National Century Financial Enterprises ("NCFE"), a health care financing company and the primary lender of Med Diversified. In his three years in this role, he restructured the Servicer department to improve operational performance and accelerated the utilization of technology to increase operational
Med Diversified Strengthens Management Team; Names James K. Happ President.
Publication: Business Wire
Date: Wednesday, October 16 2002
Company: Med Diversified Inc.
Location: United States
National Century was a financier of last resort for health-care providers....Oh Really? Pay attention!
Defense attorneys portray government's chief witness as liar
Wednesday, February 27, 2008 - 2:39 PM EST
Business First of Columbus - by Kevin Kemper Business First
"MAIN ARCHITET" ?? Please!! Let's look at where this "Main Architect" came up with this FRAUD!
The testimony of a main architect of the largest alleged fraud ever to take place at a private company ended Wednesday morning, with defense attorneys suggesting the witness is a liar.
Sherry Gibson, the former executive vice president of compliance at National Century Financial Enterprises Inc., concluded her three-and-a-half days of testimony, but not before defense attorneys attempted to draw blood for the last time. Gibson testified earlier that she was at the center of a $2.84 billion fraud that led to National Century's 2002 bankruptcy. She also implicated the five executives standing trial in U.S. District Court in Columbus on criminal fraud, conspiracy and money laundering charges.
Standing trial are Rebecca S. Parrett, Donald H. Ayers, Roger S. Faulkenberry, Randolph H. Speer and James E. Dierker, all of whom have pleaded not guilty. If convicted, the defendants face 30 years to life in prison.
Gibson was indicted, too, but pleaded guilty in 2003 to conspiracy to commit securities fraud. She spent three years in a federal penitentiary in Kentucky, repaid $420,000 to the government and agreed to cooperate with the Justice Department's investigation into National Century.
Before she left the stand, defense attorneys attempted to discredit Gibson's testimony for the last time, while laying blame solely on her.
"Who was the No. 1 person falsifying investor reports?" asked Gregory Peterson, attorney for Parrett.
"I was," Gibson said.
"You had the option of telling the truth, did you not?" asked Frederick Benton, attorney for Speer.
"Yes," Gibson said.
"You lied as a matter of choice?" Benton asked.
"Yes," Gibson said.
Javier Armengau, attorney for Faulkenberry, asked Gibson about the people at the firm who knew about National Century making illegal advances to health-care clients. When Gibson named the defendants on trial, Armengau accused her of parroting the government's indictment, leaving out former National Century employees who testified before Gibson who knew about fraud at the company.
National Century was a financier of last resort for health-care providers. The firm specialized in buying receivables from medical businesses at a discount, giving them cash up front so they could pay their bills. It then packaged the receivables as asset-backed bonds and sold them to investors.
Wednesday, February 27, 2008 - 2:39 PM EST
Business First of Columbus - by Kevin Kemper Business First
"MAIN ARCHITET" ?? Please!! Let's look at where this "Main Architect" came up with this FRAUD!
The testimony of a main architect of the largest alleged fraud ever to take place at a private company ended Wednesday morning, with defense attorneys suggesting the witness is a liar.
Sherry Gibson, the former executive vice president of compliance at National Century Financial Enterprises Inc., concluded her three-and-a-half days of testimony, but not before defense attorneys attempted to draw blood for the last time. Gibson testified earlier that she was at the center of a $2.84 billion fraud that led to National Century's 2002 bankruptcy. She also implicated the five executives standing trial in U.S. District Court in Columbus on criminal fraud, conspiracy and money laundering charges.
Standing trial are Rebecca S. Parrett, Donald H. Ayers, Roger S. Faulkenberry, Randolph H. Speer and James E. Dierker, all of whom have pleaded not guilty. If convicted, the defendants face 30 years to life in prison.
Gibson was indicted, too, but pleaded guilty in 2003 to conspiracy to commit securities fraud. She spent three years in a federal penitentiary in Kentucky, repaid $420,000 to the government and agreed to cooperate with the Justice Department's investigation into National Century.
Before she left the stand, defense attorneys attempted to discredit Gibson's testimony for the last time, while laying blame solely on her.
"Who was the No. 1 person falsifying investor reports?" asked Gregory Peterson, attorney for Parrett.
"I was," Gibson said.
"You had the option of telling the truth, did you not?" asked Frederick Benton, attorney for Speer.
"Yes," Gibson said.
"You lied as a matter of choice?" Benton asked.
"Yes," Gibson said.
Javier Armengau, attorney for Faulkenberry, asked Gibson about the people at the firm who knew about National Century making illegal advances to health-care clients. When Gibson named the defendants on trial, Armengau accused her of parroting the government's indictment, leaving out former National Century employees who testified before Gibson who knew about fraud at the company.
National Century was a financier of last resort for health-care providers. The firm specialized in buying receivables from medical businesses at a discount, giving them cash up front so they could pay their bills. It then packaged the receivables as asset-backed bonds and sold them to investors.
National Century Financial Enterprises case ranks up there with Enron and WorldCom, prosecutors say.
Trials in huge fraud case to begin
Sunday, February 3, 2008 3:32 AM
By Jodi Andes
THE COLUMBUS DISPATCH
As fraud cases go, the National Century Financial Enterprises case ranks up there with Enron and WorldCom, prosecutors say.
Investors in the Dublin-based company lost more than $1.9 billion after the financing giant filed for bankruptcy in 2002. And at least 275 health-care companies collapsed, putting thousands out of work and affecting thousands of patients. (I wonder if the governor of AZ is aware of this case?)
National Century's collapse never gained much attention outside business circles, largely because it was a privately held company. But some, such as large pension funds and the state of Arizona, lost millions.
"I always say it's the largest, most significant case you've never heard of," said Kathy Patrick, an Arizona attorney representing 30 clients who lost a total of $1.6 billion.
By comparison, the scandals that destroyed publicly traded Enron and WorldCom hit thousands of stockholders. The Enron scandal wiped out 5,600 jobs and $2.1 billion in pensions and destroyed $60 billion in market value. The $11 billion WorldCom accounting fraud resulted in investor losses estimated at $180 billion, and it put more than 20,000 people out of work and destroyed their retirement funds.
Eleven people have been charged in connection with the National Century collapse. Four already have pleaded guilty and agreed to testify against the others.
The rest will defend themselves in four trials that are expected to span most of the year. The first starts Monday, and the last is scheduled to begin on Oct. 1.
Former CEO and co-founder Lance K. Poulsen is to be tried twice -- on March 7, with a co-defendant, on a charge of witness tampering, and again on Aug. 4, on charges of fraud, conspiracy and money laundering.
The trial that starts on Monday is expected to last at least two months. Facing charges ranging from conspiracy to money laundering are the other two co-founders, Rebecca S. Parrett and Donald H. Ayers, as well as former executives Randolph H. Speer, Roger S. Faulkenberry and James E. Dierker. If convicted on all charges, all but Dierker could be sentenced to life in prison.
At 39, Dierker is the youngest defendant. He could be sentenced to 25 years in prison if convicted.
Those familiar with the case say it is one to watch because of its immediate and continuing effect on the national economy.
A company is born
Ayers, Parrett and Poulsen founded National Century in 1991 to offer financing to small hospitals, clinics, nursing homes and other health-care providers.
National Century agreed to buy the providers' uncollected debt owed by patients, or accounts receivable, and give the providers cash to cover expenses. The smaller companies didn't have to wait for insurance reimbursement, and National Century kept a fee or percentage of what it collected.
To get cash to give the smaller companies, National Century sold bonds to investors -- including some big pension funds, which were among those hit hardest by National Century's collapse.
The pension fund for New York City police, firefighters and other workers began investing in National Century in 2000. The company's bonds were attractive because of their life span -- usually three years -- and high bond rating, said New York lawyer Steve Fineman.
Fitch Investor Services and Standard & Poor's gave National Century the highest rating -- AAA.
"It showed it was a conservative investment," Fineman said.
But within two years, and only a year after the Sept. 11 terrorist attack, the New York City workers' fund lost $89 million. The hit was not big enough to cause workers to lose their pensions, but big enough that the fund still is trying to recoup five years later, he said.
New York City workers were not alone.
A consortium of Arizona investors, including the state government, was hit hardest and has sued National Century executives for $1.6 billion. Millions came from the state's investment pool, money that funds such things as roads and schools and supplements the expenses of everyday government, said Kathy Patrick, who represents the consortium.
After the money was lost, public projects were delayed and some workers were laid off, Patrick said.
The cost of the National Century collapse hasn't yet been measured, but it's safe to assume that consumers are feeling the effects, said W.C. Benton, a health-care business professor at Ohio State University's Fisher College of Business
"The fact that the doctors go out of business means fewer clinics," he said. "Prices increase because of fewer places of service."
National Century financed a few small hospitals, and at least one in Texas filed for bankruptcy, but no hospital in Ohio was affected, said Tiffany Himmelreich, a spokeswoman for the Ohio Hospital Association.
Services proved popular
Early on, National Century carved out an attractive business niche.
Few if any companies were providing such a service at the time, Benton said. And the three founders had the experience to make it work.
Poulsen had a background in marketing and financing. Ayers was a former president of Grant Medical Center. Parrett, now divorced from Ayers, had experience handling receivable accounts at Grant. Obtaining the necessary capital wasn't a problem. National Century raised $4.4 billion from investors between 1998 and 2002 to lend to health-care providers.
The company's headquarters were at 6125 Memorial Dr. in Dublin. National Century grew to have 327 employees in the suburb and three other cities.
From the outside, its loans appeared very safe, Patrick said.
For every dollar loaned out, the company promised to keep 17 cents in reserve. Health-care providers were told they would receive 80 or 90 cents on the dollar of the debt assumed for collection by National Century, federal documents show.
Getting less than what they were owed in exchange for money in hand quickly was appealing to physicians for several reasons, Benton said.
They wouldn't have to wait months for Medicaid reimbursement or for patients to pay their bills. Nor would they have to bother with paper-intensive billing, a side of the business most doctors dislike, he said.
"It was a great idea to keep from having to have some billing center in your office," Benton said.
National Century became a reliable -- and sometimes the sole -- stream of income for health-care providers as the company grew to become one of the nation's largest health-care financers, Benton said.
That's why so many health-care providers collapsed in the wake of National Century's bankruptcy.
"When the cash is cut off, you can't pay your suppliers or your employees," Benton said.
Business practices questioned
By 2000, allegations of wrongdoing began to surface.
Assistant U.S. attorneys say that the company's collapse resulted from criminal decisions, not a failed business plan.
Greed set in, they say.
According to federal indictments:
Company executives loaned money to companies in which they were principal stakeholders "to pay operating expenses of these health-care providers which was to benefit Poulsen, Ayers and Parrett."
Executives used the money to support lavish lifestyles, which involved such things as Poulsen's 60-foot yacht and Parrett's 4,725-square-foot Arizona home with a five-car garage.
In some cases, National Century agreed to take over providers' debts without formally buying the accounts, which amounted to the company having millions in unsecured loans. In 2001 and 2002, National Century advanced $700 million in loans to companies without purchasing the accounts receivable.
As reserves weakened, investors and Securities Exchange Commission officials were given false financial reports that said National Century's two subsidiaries, NPF VI and NPF XII, were healthy. But money was being shifted between the two to make it appear they had adequate money in reserve, the indictment says.
The company declared bankruptcy in 2002 and shut down shortly after.
Company executives have maintained their innocence. Attorneys and U.S. District Judge Algenon L. Marbley have prepared for a long, tedious legal fight.
One of the challenges will be to make topics such as "securitization" easy for jurors to understand, said Greg Peterson, Parrett's attorney. He is concerned that complex business practices will be overly simplified and misrepresented.
"Oversimplifying things is very dangerous," Peterson said. "These are very dry issues. It's a tall order for a juror to sit there and pay attention."
On the other side, victims fear that if National Century executives emerge unscathed, that could provide an arena for fraud in an investment area that has long been considered safe, Patrick said.
"These are the types of investments that are held in mutual funds and pension funds across the country," she said. "It's important that the investments be true because pensions rely on them.
"This is a really pivotal trial."
Dispatch staff reporter Suzanne Hoholik and researchers Linda Deitch and Amy Disch contributed to this story.
jandes@dispatch.com
Sunday, February 3, 2008 3:32 AM
By Jodi Andes
THE COLUMBUS DISPATCH
As fraud cases go, the National Century Financial Enterprises case ranks up there with Enron and WorldCom, prosecutors say.
Investors in the Dublin-based company lost more than $1.9 billion after the financing giant filed for bankruptcy in 2002. And at least 275 health-care companies collapsed, putting thousands out of work and affecting thousands of patients. (I wonder if the governor of AZ is aware of this case?)
National Century's collapse never gained much attention outside business circles, largely because it was a privately held company. But some, such as large pension funds and the state of Arizona, lost millions.
"I always say it's the largest, most significant case you've never heard of," said Kathy Patrick, an Arizona attorney representing 30 clients who lost a total of $1.6 billion.
By comparison, the scandals that destroyed publicly traded Enron and WorldCom hit thousands of stockholders. The Enron scandal wiped out 5,600 jobs and $2.1 billion in pensions and destroyed $60 billion in market value. The $11 billion WorldCom accounting fraud resulted in investor losses estimated at $180 billion, and it put more than 20,000 people out of work and destroyed their retirement funds.
Eleven people have been charged in connection with the National Century collapse. Four already have pleaded guilty and agreed to testify against the others.
The rest will defend themselves in four trials that are expected to span most of the year. The first starts Monday, and the last is scheduled to begin on Oct. 1.
Former CEO and co-founder Lance K. Poulsen is to be tried twice -- on March 7, with a co-defendant, on a charge of witness tampering, and again on Aug. 4, on charges of fraud, conspiracy and money laundering.
The trial that starts on Monday is expected to last at least two months. Facing charges ranging from conspiracy to money laundering are the other two co-founders, Rebecca S. Parrett and Donald H. Ayers, as well as former executives Randolph H. Speer, Roger S. Faulkenberry and James E. Dierker. If convicted on all charges, all but Dierker could be sentenced to life in prison.
At 39, Dierker is the youngest defendant. He could be sentenced to 25 years in prison if convicted.
Those familiar with the case say it is one to watch because of its immediate and continuing effect on the national economy.
A company is born
Ayers, Parrett and Poulsen founded National Century in 1991 to offer financing to small hospitals, clinics, nursing homes and other health-care providers.
National Century agreed to buy the providers' uncollected debt owed by patients, or accounts receivable, and give the providers cash to cover expenses. The smaller companies didn't have to wait for insurance reimbursement, and National Century kept a fee or percentage of what it collected.
To get cash to give the smaller companies, National Century sold bonds to investors -- including some big pension funds, which were among those hit hardest by National Century's collapse.
The pension fund for New York City police, firefighters and other workers began investing in National Century in 2000. The company's bonds were attractive because of their life span -- usually three years -- and high bond rating, said New York lawyer Steve Fineman.
Fitch Investor Services and Standard & Poor's gave National Century the highest rating -- AAA.
"It showed it was a conservative investment," Fineman said.
But within two years, and only a year after the Sept. 11 terrorist attack, the New York City workers' fund lost $89 million. The hit was not big enough to cause workers to lose their pensions, but big enough that the fund still is trying to recoup five years later, he said.
New York City workers were not alone.
A consortium of Arizona investors, including the state government, was hit hardest and has sued National Century executives for $1.6 billion. Millions came from the state's investment pool, money that funds such things as roads and schools and supplements the expenses of everyday government, said Kathy Patrick, who represents the consortium.
After the money was lost, public projects were delayed and some workers were laid off, Patrick said.
The cost of the National Century collapse hasn't yet been measured, but it's safe to assume that consumers are feeling the effects, said W.C. Benton, a health-care business professor at Ohio State University's Fisher College of Business
"The fact that the doctors go out of business means fewer clinics," he said. "Prices increase because of fewer places of service."
National Century financed a few small hospitals, and at least one in Texas filed for bankruptcy, but no hospital in Ohio was affected, said Tiffany Himmelreich, a spokeswoman for the Ohio Hospital Association.
Services proved popular
Early on, National Century carved out an attractive business niche.
Few if any companies were providing such a service at the time, Benton said. And the three founders had the experience to make it work.
Poulsen had a background in marketing and financing. Ayers was a former president of Grant Medical Center. Parrett, now divorced from Ayers, had experience handling receivable accounts at Grant. Obtaining the necessary capital wasn't a problem. National Century raised $4.4 billion from investors between 1998 and 2002 to lend to health-care providers.
The company's headquarters were at 6125 Memorial Dr. in Dublin. National Century grew to have 327 employees in the suburb and three other cities.
From the outside, its loans appeared very safe, Patrick said.
For every dollar loaned out, the company promised to keep 17 cents in reserve. Health-care providers were told they would receive 80 or 90 cents on the dollar of the debt assumed for collection by National Century, federal documents show.
Getting less than what they were owed in exchange for money in hand quickly was appealing to physicians for several reasons, Benton said.
They wouldn't have to wait months for Medicaid reimbursement or for patients to pay their bills. Nor would they have to bother with paper-intensive billing, a side of the business most doctors dislike, he said.
"It was a great idea to keep from having to have some billing center in your office," Benton said.
National Century became a reliable -- and sometimes the sole -- stream of income for health-care providers as the company grew to become one of the nation's largest health-care financers, Benton said.
That's why so many health-care providers collapsed in the wake of National Century's bankruptcy.
"When the cash is cut off, you can't pay your suppliers or your employees," Benton said.
Business practices questioned
By 2000, allegations of wrongdoing began to surface.
Assistant U.S. attorneys say that the company's collapse resulted from criminal decisions, not a failed business plan.
Greed set in, they say.
According to federal indictments:
Company executives loaned money to companies in which they were principal stakeholders "to pay operating expenses of these health-care providers which was to benefit Poulsen, Ayers and Parrett."
Executives used the money to support lavish lifestyles, which involved such things as Poulsen's 60-foot yacht and Parrett's 4,725-square-foot Arizona home with a five-car garage.
In some cases, National Century agreed to take over providers' debts without formally buying the accounts, which amounted to the company having millions in unsecured loans. In 2001 and 2002, National Century advanced $700 million in loans to companies without purchasing the accounts receivable.
As reserves weakened, investors and Securities Exchange Commission officials were given false financial reports that said National Century's two subsidiaries, NPF VI and NPF XII, were healthy. But money was being shifted between the two to make it appear they had adequate money in reserve, the indictment says.
The company declared bankruptcy in 2002 and shut down shortly after.
Company executives have maintained their innocence. Attorneys and U.S. District Judge Algenon L. Marbley have prepared for a long, tedious legal fight.
One of the challenges will be to make topics such as "securitization" easy for jurors to understand, said Greg Peterson, Parrett's attorney. He is concerned that complex business practices will be overly simplified and misrepresented.
"Oversimplifying things is very dangerous," Peterson said. "These are very dry issues. It's a tall order for a juror to sit there and pay attention."
On the other side, victims fear that if National Century executives emerge unscathed, that could provide an arena for fraud in an investment area that has long been considered safe, Patrick said.
"These are the types of investments that are held in mutual funds and pension funds across the country," she said. "It's important that the investments be true because pensions rely on them.
"This is a really pivotal trial."
Dispatch staff reporter Suzanne Hoholik and researchers Linda Deitch and Amy Disch contributed to this story.
jandes@dispatch.com
James Happ served as executive VP of National Century Financial Enterprises;Previously, he served as CFO of Columbia Homecare Group, Inc.
Every compamy this guy was involved with has been indicted for FRAUD! Progressively , one larger than the next! Hmmm......
Previously, he served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc.
Pay close attention to a few terms and words:
"challenging reimbursement " ; Columbia Homecare Group, Inc.,; Med Diversified; Olsten of Columbus, Inc., ; Tender Loving Care; Gentiva Health Services, Inc.
Prior to joining Med Diversified, James Happ served as executive vice president of National Century Financial Enterprises ("NCFE"), a health care financing company and the primary lender of Med Diversified. In his three years in this role, he restructured the Servicer department to improve operational performance and accelerated the utilization of technology to increase operational
Med Diversified Strengthens Management Team; Names James K. Happ President.
Publication: Business Wire
Date: Wednesday, October 16 2002
Company: Med Diversified Inc.
Location: United States
Business Editors and Health/Medical Writers
ANDOVER, Mass.--(BUSINESS WIRE)--Oct. 16, 2002
Med Diversified, Inc., (PINK SHEETS: MDDV.PK), a leading provider of home and alternate site health care services, today announced that James K. Happ, a 16-year veteran of the health care industry, has been appointed president of Med Diversified. He will report directly to Frank P. Magliochetti, Jr., chairman and chief executive officer of Med Diversified ("the Company"), and will replace former president John J. Collura.
As previously disclosed, Mr. Collura, an executive at Gentiva Health Services, Inc. prior to joining Med Diversified, was notified by Accredo Health Services that he was potentially in violation of contractual obligations relating to non-competition. It has been mutually agreed by the Company and Mr. Collura that termination of his employment with the Company will avoid potential future distractions.
Prior to joining Med Diversified, James Happ served as executive vice president of National Century Financial Enterprises ("NCFE"), a health care financing company and the primary lender of Med Diversified.
In his three years in this role, he restructured the Servicer department to improve operational performance and accelerated the utilization of technology to increase operational
Mr. Happ has substantial experience in the home health care industry. Previously, he served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc., a home care company with more than 500 locations nationally and more than $1 billion in revenue in 1997. In this role, he directed the company through the challenging reimbursement climate known as the interim payment system, and he participated in the divestiture of all of Columbia/HCA's home care operations. He also held senior executive positions with Olsten of Columbus, Inc., a home care and staffing services franchise of the Olsten Corporation, and with Interim Services, Inc., a Florida-based staffing and home care company.
"I'm excited to join Med Diversified," said Mr. Happ. "I've followed the Company for several years and believe it has two very strong business units in Chartwell Diversified Services and Tender Loving Care. I'm also very pleased with the senior management team, the business philosophy of the company, and the employees' high quality, compassionate patient care services."
Mr. Happ holds an M.B.A. from Nova University in Ft. Lauderdale, Florida, and a B.S. in business administration from Miami University in Oxford, Ohio. He is licensed
Previously, he served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc.
Pay close attention to a few terms and words:
"challenging reimbursement " ; Columbia Homecare Group, Inc.,; Med Diversified; Olsten of Columbus, Inc., ; Tender Loving Care; Gentiva Health Services, Inc.
Prior to joining Med Diversified, James Happ served as executive vice president of National Century Financial Enterprises ("NCFE"), a health care financing company and the primary lender of Med Diversified. In his three years in this role, he restructured the Servicer department to improve operational performance and accelerated the utilization of technology to increase operational
Med Diversified Strengthens Management Team; Names James K. Happ President.
Publication: Business Wire
Date: Wednesday, October 16 2002
Company: Med Diversified Inc.
Location: United States
Business Editors and Health/Medical Writers
ANDOVER, Mass.--(BUSINESS WIRE)--Oct. 16, 2002
Med Diversified, Inc., (PINK SHEETS: MDDV.PK), a leading provider of home and alternate site health care services, today announced that James K. Happ, a 16-year veteran of the health care industry, has been appointed president of Med Diversified. He will report directly to Frank P. Magliochetti, Jr., chairman and chief executive officer of Med Diversified ("the Company"), and will replace former president John J. Collura.
As previously disclosed, Mr. Collura, an executive at Gentiva Health Services, Inc. prior to joining Med Diversified, was notified by Accredo Health Services that he was potentially in violation of contractual obligations relating to non-competition. It has been mutually agreed by the Company and Mr. Collura that termination of his employment with the Company will avoid potential future distractions.
Prior to joining Med Diversified, James Happ served as executive vice president of National Century Financial Enterprises ("NCFE"), a health care financing company and the primary lender of Med Diversified.
In his three years in this role, he restructured the Servicer department to improve operational performance and accelerated the utilization of technology to increase operational
Mr. Happ has substantial experience in the home health care industry. Previously, he served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc., a home care company with more than 500 locations nationally and more than $1 billion in revenue in 1997. In this role, he directed the company through the challenging reimbursement climate known as the interim payment system, and he participated in the divestiture of all of Columbia/HCA's home care operations. He also held senior executive positions with Olsten of Columbus, Inc., a home care and staffing services franchise of the Olsten Corporation, and with Interim Services, Inc., a Florida-based staffing and home care company.
"I'm excited to join Med Diversified," said Mr. Happ. "I've followed the Company for several years and believe it has two very strong business units in Chartwell Diversified Services and Tender Loving Care. I'm also very pleased with the senior management team, the business philosophy of the company, and the employees' high quality, compassionate patient care services."
Mr. Happ holds an M.B.A. from Nova University in Ft. Lauderdale, Florida, and a B.S. in business administration from Miami University in Oxford, Ohio. He is licensed
Poulsen, 64, and James Happ will be tried later...NOW WHY IS THIS???
Ask yourself or someone who can answer:
Poulsen, 64, and James Happ will be tried later.....why will James Happ be tried later?
National Century trial ready to go
Business First of Columbus - by Kevin Kemper
Business First
Wednesday, February 6, 2008
Running behind schedule, jury selection in the criminal trial of five executives of the failed National Century Financial Enterprises Inc. was completed late Wednesday with lawyers' opening arguments scheduled to begin Thursday morning in U.S. District Court in Columbus.
Throughout the afternoon, the third day in which attorneys worked to pick jurors, defense lawyers attempted to divine how fair and impartial jurors could be in light of their experiences with large corporations, the health care industry or their impressions of government witnesses.
Attorneys winnowed more than 250 prospects to 12 jurors with four alternates by the end of Wednesday. An extraordinarily large number of candidates were called because the trial is expected to be complex and last at least two months.
The government is alleging the five executives and two others who will be tried later, including CEO Lance Poulsen, masterminded a $3 billion fraud through their business of buying accounts receivables from health-care providers at a discount and packaging the accounts as bond funds, which were sold to raise money to buy more accounts. The government has accused the executives of diverting $2.84 billion for their benefit.
The Dublin company collapsed into bankruptcy in 2002. The executives were later indicted on conspriacy, securities, fraud and money laundering charges. Poulsen also faces claims that he tried to bribe a government witness.
Toward the end of jury selection, defense attorneys began to offer some insight into their clients' defense claims.
Javier Armengau, attorney for Roger Faulkenberry, 46, former director of securitizations at National Century, asked jury candidates if they thought it was reliable to rely on the advice or direction of their immediate supervisor or corporate counsel when making decisions.
Meanwhile, Leonard Yelsky, the lawyer for ex-Vice President James Dierker, 39, brought up infamous government mob informants and asked jury prospects to consider during trial whether informants in the case are telling the truth "after finding Jesus" or are attempting to lessen any criminal sentence they may face.
The government has indicated in court documents that it plans to call four National Century employees as witnesses to testify against the executives, including Vice Chairwoman Rebecca Parrett, 58; Chief Operating Officer Donald Ayers, 70; and Chief Financial Officer Randolph Speer, 57.
Poulsen, 64, and James Happ will be tried later. If found guilty, each defendant faces 30 years to life in prison
Poulsen, 64, and James Happ will be tried later.....why will James Happ be tried later?
National Century trial ready to go
Business First of Columbus - by Kevin Kemper
Business First
Wednesday, February 6, 2008
Running behind schedule, jury selection in the criminal trial of five executives of the failed National Century Financial Enterprises Inc. was completed late Wednesday with lawyers' opening arguments scheduled to begin Thursday morning in U.S. District Court in Columbus.
Throughout the afternoon, the third day in which attorneys worked to pick jurors, defense lawyers attempted to divine how fair and impartial jurors could be in light of their experiences with large corporations, the health care industry or their impressions of government witnesses.
Attorneys winnowed more than 250 prospects to 12 jurors with four alternates by the end of Wednesday. An extraordinarily large number of candidates were called because the trial is expected to be complex and last at least two months.
The government is alleging the five executives and two others who will be tried later, including CEO Lance Poulsen, masterminded a $3 billion fraud through their business of buying accounts receivables from health-care providers at a discount and packaging the accounts as bond funds, which were sold to raise money to buy more accounts. The government has accused the executives of diverting $2.84 billion for their benefit.
The Dublin company collapsed into bankruptcy in 2002. The executives were later indicted on conspriacy, securities, fraud and money laundering charges. Poulsen also faces claims that he tried to bribe a government witness.
Toward the end of jury selection, defense attorneys began to offer some insight into their clients' defense claims.
Javier Armengau, attorney for Roger Faulkenberry, 46, former director of securitizations at National Century, asked jury candidates if they thought it was reliable to rely on the advice or direction of their immediate supervisor or corporate counsel when making decisions.
Meanwhile, Leonard Yelsky, the lawyer for ex-Vice President James Dierker, 39, brought up infamous government mob informants and asked jury prospects to consider during trial whether informants in the case are telling the truth "after finding Jesus" or are attempting to lessen any criminal sentence they may face.
The government has indicated in court documents that it plans to call four National Century employees as witnesses to testify against the executives, including Vice Chairwoman Rebecca Parrett, 58; Chief Operating Officer Donald Ayers, 70; and Chief Financial Officer Randolph Speer, 57.
Poulsen, 64, and James Happ will be tried later. If found guilty, each defendant faces 30 years to life in prison
The President & CEO, Lance K. Poulsen of NCFE FRAUD SCAM wants....
Profile: Lance K. Poulsen(From the 'Dispatch' Business section for May 9, 2000)
Tuesday, May 9, 2000 4:19 PM
This is where we need to begin the unravelling of this MASSIVE fraud!
(Pay attention to the part of this Bio at two crucial insights that begin the dots....Lance Poulsen states that his experiences as : director of marketing services, vice president of marketing, and president of Rajo Motor and Manufacturing Inc. his experience prepared him to "BEGIN HIS OWN INSURANCE BUSINESS"? Better yet, the largest Financial LENDING Instituiton to "FAILING" Healthcare companies with reeivables?
Also: "If I could change one thing about my industry: We would like to standardize the technology making the medical industry more efficient and cost-effective." (This is something that must be considered when Both Sides of the aisle want to implement electronic files for our healthcare system. Ask, is the law written to protect HONEST Americans and written to prevent the minds like Lance Poulsen another open door for healthcare fraud in America?
Profile: Lance K. Poulsen
(From the 'Dispatch' Business section for May 9, 2000) Tuesday, May 9, 2000 4:19 PM
Age: 56
Title: Chairman and president
Company name: National Century Financial Enterprises Inc.
Company overview: NCFE is the country's largest provider of health-care accounts-receivable financing via its securitized portfolios, serving more than 1,500 medical providers. In addition to its Dublin headquarters, NCFE has offices in Scottsdale, Ariz.; Durham, N.C.; and Port Charlotte, Fla. The company employs more than 240 and projects revenues of more than $350 million in 2000.
Thumbnail sketch of my career:
Marketing has been my primary focus over the past 32 years. My first professional position was with Hamm's Brewery in St. Paul, Minn., as director of marketing services. I went on to serve as vice president of marketing at Atlantic India Rubber and Plastics Co. in Chicago, president of Rajo Motor and Manufacturing Inc. and president of Dinsmore Tire Corp. in Palm Beach, Fla.
These experiences prepared me well to begin my own insurance business in Columbus in 1986 called the Poulsen Group. And, as a result of that venture, NCFE became a reality in 1991.
Education: B.S., business administration, Roosevelt University; master's, marketing science and international business, University of Iowa
First job: As a teenager, I was a box wrapper and part-time salesman at the Robert Hall Clothing Store.
What I learned: Selling and marketing is more lucrative than packaging.
Management philosophy: As the old Danish saying goes, "God gives every bird its food, but does not drop it into the nest." Because my parents immigrated from a European nation, I, as a first-generation American, have learned our country abounds in opportunity for those willing to take a chance and venture a new idea.
My biggest mistake: Once while cruising in the coastal waters of Florida, I inadvertently turned the chart upside down and ran my vessel hard aground at a high speed.
How I resolved that mistake: I now make sure I always have the chart right-side up. Much like life, some things appear different than they actually are, and we must take time to examine the facts.
Recent corporation accomplishment: We've purchased and turned around more than $12 billion of receivables to date. NCFE also has earned "AAA" bond ratings from Fitch Investor Services, Duff & Phelps Credit Rating Co. and Standard & Poor's Corp.
Corporate changes or initiatives: NCFE is working to offer clients online capabilities that will include Web-based health-care financial services.
Biggest challenge my company faces: Our biggest challenge is to attract and hire competent young men and women who can adapt to the ever-changing e-commerce world.
How my industry has changed in the past decade: As a large finance company in the medical arena, in the last 10 years, the burden of paying for health care in the United States has shifted from the governmental sector to the private sector. Hospitals, even the not-for-profit hospitals, must render services on a cost-effective basis. This refocusing of our industry in a managed-care environment is our challenge.
If I could change one thing about my industry: We would like to standardize the technology making the medical industry more efficient and cost-effective.
My biggest complaint about Columbus: It doesn't have an NFL team or a central hub airport.
My favorite place for a business lunch: The Bogey Inn
What I do to relax: Boating
My last vacation: I visited friends and family in Denmark and introduced my wife to all in December.
What it all means: Do the best you can as often as possible and have fun doing it.
Tuesday, May 9, 2000 4:19 PM
This is where we need to begin the unravelling of this MASSIVE fraud!
(Pay attention to the part of this Bio at two crucial insights that begin the dots....Lance Poulsen states that his experiences as : director of marketing services, vice president of marketing, and president of Rajo Motor and Manufacturing Inc. his experience prepared him to "BEGIN HIS OWN INSURANCE BUSINESS"? Better yet, the largest Financial LENDING Instituiton to "FAILING" Healthcare companies with reeivables?
Also: "If I could change one thing about my industry: We would like to standardize the technology making the medical industry more efficient and cost-effective." (This is something that must be considered when Both Sides of the aisle want to implement electronic files for our healthcare system. Ask, is the law written to protect HONEST Americans and written to prevent the minds like Lance Poulsen another open door for healthcare fraud in America?
Profile: Lance K. Poulsen
(From the 'Dispatch' Business section for May 9, 2000) Tuesday, May 9, 2000 4:19 PM
Age: 56
Title: Chairman and president
Company name: National Century Financial Enterprises Inc.
Company overview: NCFE is the country's largest provider of health-care accounts-receivable financing via its securitized portfolios, serving more than 1,500 medical providers. In addition to its Dublin headquarters, NCFE has offices in Scottsdale, Ariz.; Durham, N.C.; and Port Charlotte, Fla. The company employs more than 240 and projects revenues of more than $350 million in 2000.
Thumbnail sketch of my career:
Marketing has been my primary focus over the past 32 years. My first professional position was with Hamm's Brewery in St. Paul, Minn., as director of marketing services. I went on to serve as vice president of marketing at Atlantic India Rubber and Plastics Co. in Chicago, president of Rajo Motor and Manufacturing Inc. and president of Dinsmore Tire Corp. in Palm Beach, Fla.
These experiences prepared me well to begin my own insurance business in Columbus in 1986 called the Poulsen Group. And, as a result of that venture, NCFE became a reality in 1991.
Education: B.S., business administration, Roosevelt University; master's, marketing science and international business, University of Iowa
First job: As a teenager, I was a box wrapper and part-time salesman at the Robert Hall Clothing Store.
What I learned: Selling and marketing is more lucrative than packaging.
Management philosophy: As the old Danish saying goes, "God gives every bird its food, but does not drop it into the nest." Because my parents immigrated from a European nation, I, as a first-generation American, have learned our country abounds in opportunity for those willing to take a chance and venture a new idea.
My biggest mistake: Once while cruising in the coastal waters of Florida, I inadvertently turned the chart upside down and ran my vessel hard aground at a high speed.
How I resolved that mistake: I now make sure I always have the chart right-side up. Much like life, some things appear different than they actually are, and we must take time to examine the facts.
Recent corporation accomplishment: We've purchased and turned around more than $12 billion of receivables to date. NCFE also has earned "AAA" bond ratings from Fitch Investor Services, Duff & Phelps Credit Rating Co. and Standard & Poor's Corp.
Corporate changes or initiatives: NCFE is working to offer clients online capabilities that will include Web-based health-care financial services.
Biggest challenge my company faces: Our biggest challenge is to attract and hire competent young men and women who can adapt to the ever-changing e-commerce world.
How my industry has changed in the past decade: As a large finance company in the medical arena, in the last 10 years, the burden of paying for health care in the United States has shifted from the governmental sector to the private sector. Hospitals, even the not-for-profit hospitals, must render services on a cost-effective basis. This refocusing of our industry in a managed-care environment is our challenge.
If I could change one thing about my industry: We would like to standardize the technology making the medical industry more efficient and cost-effective.
My biggest complaint about Columbus: It doesn't have an NFL team or a central hub airport.
My favorite place for a business lunch: The Bogey Inn
What I do to relax: Boating
My last vacation: I visited friends and family in Denmark and introduced my wife to all in December.
What it all means: Do the best you can as often as possible and have fun doing it.
PhyAmerica founder Steven Scott
Health-care execs testify National Century routinely overfunded companiesBusiness First of Columbus - by Kevin Kemper
Business First
Two executives of health-care companies testified in the National Century Financial Enterprises Inc. trial Tuesday that the company gave them far more funding than they deserved.
In a session abbreviated because of the inclement weather, the government witnesses - both former chief financial officers of National Century customers - told jurors the Dublin business funded their financially troubled employers with millions of dollars in excess of the receivables it had purchased so the firms could continue operating.
National Century bought accounts receivable from health-care providers at a discount in exchange for fast cash to the owners. It would then package the receivables as bonds and sell them to investors, while collecting on its customers' bills. The privately held company collapsed in 2002 owing nearly $3 billion to creditors.
Bryan Weiss testified that his former employer, MediManagement, ran several southern California psychiatric clinics and a 46-bed hospital in east Los Angeles that were so strapped for money they operated week to week. He told the jury he was concerned about the long-term viability of MediManagement because it had a large amount of unsecured debt owed to National Century, its only lender.
MediManagement, Weiss said, was owned by National Century and three of its executives, CEO Lance Poulsen, Chief Operating Officer Donald Ayers and Vice Chairwoman Rebecca Parrett.
National Century financed MediManagement through its NPF XII fund, which the Justice Department has alleged the owners of National Century used to divert millions of dollars to benefit themselves.
Parrett, Ayers and three other National Century executives have been on trial since Feb. 4 in U.S. District Court in Columbus facing criminal fraud, conspiracy and money laundering charges. Also charged were CFO Randolph Speer, Executive Vice President Roger Faulkenberry and James Dierker, a vice president.
All have pleaded not guilty to the charges.
Poulsen will stand trial in late summer, after he is tried on accusations he and an associate tried to bribe a government witness. Another executive, James Happ, is scheduled to stand trial in the fall.
Business troubles
In his testimony, Weiss said Poulsen informed him in a fax that the Ohio company would stop funding MediManagement on Oct. 31, 2002, a day before the business was scheduled to issue payroll for its hospitals and 18 days before National Century would file for bankruptcy. Weiss said MediManagement went into bankruptcy a few weeks later, with a debt of more than $200 million.
Under questioning from defense lawyers, Weiss said MediManagement's facilities, which served indigent communities, were able to stay open and eventually be sold to another health-care company only because of National Century's funding.
Also testifying Tuesday was Stanley Haines, CFO of PhyAmerica Physician Group Inc., a Durham, N.C.-based physician management business. Haines said the company's long-term debt grew during his tenure from $175 million to at least $200 million.
Haines explained to jurors that he joined PhyAmerica in June 2000 because he wanted to help turn around the struggling company, which at the time was publicly traded. PhyAmerica's operating costs far exceeded its revenue, Haines said, so it relied on National Century as a financial lifeline.
Haines said there was typically no limit to the amount of funding it could seek from National Century, though when it asked for more money, National Century's account servicer often denied the request. He said PhyAmerica founder Steven Scott would then go directly to Poulsen, who would approve additional funding.
By 2002, Haines said the business was having difficulty getting funding from National Century. PhyAmerica filed for Chapter 11 bankruptcy protection in November 2002 citing a cutoff of funding from National Century. It owed National Century $365 million, but its assets totaled between $10 million and $50 million.
Defense attorneys are scheduled to cross-examine Haines Wednesday.
Business First
Two executives of health-care companies testified in the National Century Financial Enterprises Inc. trial Tuesday that the company gave them far more funding than they deserved.
In a session abbreviated because of the inclement weather, the government witnesses - both former chief financial officers of National Century customers - told jurors the Dublin business funded their financially troubled employers with millions of dollars in excess of the receivables it had purchased so the firms could continue operating.
National Century bought accounts receivable from health-care providers at a discount in exchange for fast cash to the owners. It would then package the receivables as bonds and sell them to investors, while collecting on its customers' bills. The privately held company collapsed in 2002 owing nearly $3 billion to creditors.
Bryan Weiss testified that his former employer, MediManagement, ran several southern California psychiatric clinics and a 46-bed hospital in east Los Angeles that were so strapped for money they operated week to week. He told the jury he was concerned about the long-term viability of MediManagement because it had a large amount of unsecured debt owed to National Century, its only lender.
MediManagement, Weiss said, was owned by National Century and three of its executives, CEO Lance Poulsen, Chief Operating Officer Donald Ayers and Vice Chairwoman Rebecca Parrett.
National Century financed MediManagement through its NPF XII fund, which the Justice Department has alleged the owners of National Century used to divert millions of dollars to benefit themselves.
Parrett, Ayers and three other National Century executives have been on trial since Feb. 4 in U.S. District Court in Columbus facing criminal fraud, conspiracy and money laundering charges. Also charged were CFO Randolph Speer, Executive Vice President Roger Faulkenberry and James Dierker, a vice president.
All have pleaded not guilty to the charges.
Poulsen will stand trial in late summer, after he is tried on accusations he and an associate tried to bribe a government witness. Another executive, James Happ, is scheduled to stand trial in the fall.
Business troubles
In his testimony, Weiss said Poulsen informed him in a fax that the Ohio company would stop funding MediManagement on Oct. 31, 2002, a day before the business was scheduled to issue payroll for its hospitals and 18 days before National Century would file for bankruptcy. Weiss said MediManagement went into bankruptcy a few weeks later, with a debt of more than $200 million.
Under questioning from defense lawyers, Weiss said MediManagement's facilities, which served indigent communities, were able to stay open and eventually be sold to another health-care company only because of National Century's funding.
Also testifying Tuesday was Stanley Haines, CFO of PhyAmerica Physician Group Inc., a Durham, N.C.-based physician management business. Haines said the company's long-term debt grew during his tenure from $175 million to at least $200 million.
Haines explained to jurors that he joined PhyAmerica in June 2000 because he wanted to help turn around the struggling company, which at the time was publicly traded. PhyAmerica's operating costs far exceeded its revenue, Haines said, so it relied on National Century as a financial lifeline.
Haines said there was typically no limit to the amount of funding it could seek from National Century, though when it asked for more money, National Century's account servicer often denied the request. He said PhyAmerica founder Steven Scott would then go directly to Poulsen, who would approve additional funding.
By 2002, Haines said the business was having difficulty getting funding from National Century. PhyAmerica filed for Chapter 11 bankruptcy protection in November 2002 citing a cutoff of funding from National Century. It owed National Century $365 million, but its assets totaled between $10 million and $50 million.
Defense attorneys are scheduled to cross-examine Haines Wednesday.
NATIONAL CENTURY BANKRUPTCY NEWS
NATIONAL CENTURY BANKRUPTCY NEWS tracks the restructuring of Interstate Bakeries Corp, NPF VI Inc, NPF XII Inc, National Century Financial Enterprises Inc and National Premier Financial Services Inc.
Finance General News | Home
DUBLIN, Ohio, Feb. 3 The next trial in the National Century Financial Enterprise fraud case is to begin this week in federal court in Ohio, it was reported Sunday.
The Columbus (Ohio) Dispatch reported Natural Century co-founders, Rebecca S. Parrett and Donald H. Ayers, will be on trial in Columbus starting Monday, along with former executives Randolph H. Speer, Roger S. Faulkenberry and James E. Dierker.
The five executives are all facing fraud charges in relation to the more than $1.9 billion National Century investors lost when the healthcare finance company officially declared bankruptcy in 2002.
The bankruptcy filing by the privately held company caused thousands of people to lose their jobs and helped cause the collapse of at least 275 healthcare companies.
The National Century officials have been accused of charges ranging from money laundering to conspiracy. All of the co-defendants, except Dierker, could receive life prison sentences if convicted. The Dispatch said Dierker is facing a maximum sentence of 25 years in prison if convicted.
Three more trials involving other National Century defendants are scheduled throughout the year.
Copyright 2008 by UPI
Finance General News | Home
DUBLIN, Ohio, Feb. 3 The next trial in the National Century Financial Enterprise fraud case is to begin this week in federal court in Ohio, it was reported Sunday.
The Columbus (Ohio) Dispatch reported Natural Century co-founders, Rebecca S. Parrett and Donald H. Ayers, will be on trial in Columbus starting Monday, along with former executives Randolph H. Speer, Roger S. Faulkenberry and James E. Dierker.
The five executives are all facing fraud charges in relation to the more than $1.9 billion National Century investors lost when the healthcare finance company officially declared bankruptcy in 2002.
The bankruptcy filing by the privately held company caused thousands of people to lose their jobs and helped cause the collapse of at least 275 healthcare companies.
The National Century officials have been accused of charges ranging from money laundering to conspiracy. All of the co-defendants, except Dierker, could receive life prison sentences if convicted. The Dispatch said Dierker is facing a maximum sentence of 25 years in prison if convicted.
Three more trials involving other National Century defendants are scheduled throughout the year.
Copyright 2008 by UPI
Tuesday, February 26, 2008
Witness says National Century CEO threatened to blame her
Monday, February 25, 2008 - 5:44 PM EST
Business First of Columbus - by Kevin Kemper Business First
The woman at the center of the government's case against several executives of the defunct National Century Financial Enterprises Inc. testified Monday that the company's CEO told her she would be thrown under the bus if fraud at the company ever came public.
Sherry Gibson, the Dublin company's executive vice president of compliance, said under cross-examination Monday afternoon that National Century chief Lance Poulsen told her he would not accept responsibility if the company was accused of fraud and would shift blame to her. Poulsen's attitude was especially hurtful, Gibson said, because she had always been loyal to her boss.
Gibson previously testified the company kept two sets of books, one accurate and another for investors that had been ginned to show National Century in better financial shape. Gibson said Monday it was primarily she and Poulsen who falsified company documents and investor reports.
Gibson said shortly after that conversation with Poulsen she began keeping copies of documents at her home in an effort to protect herself in case the company unraveled.
National Century was a financier of last resort for health-care providers. The firm specialized in buying receivables from medical businesses at a discount, giving them cash up front so they could pay their bills. It then packaged the receivables as asset-backed bonds and sold them to investors.
The government has accused five executives - Rebecca Parrett, Donald Ayers, Roger Faulkenberry, Randolph Speer and James Dierker - of engaging in conspiracy, money laundering and securities fraud in a scheme that led to the company's $3 billion collapse into bankruptcy in 2002. The executives pleaded not guilty to the charges.
Gibson had been indicted as well, but she pleaded guilty in 2003 to a count of conspiracy to commit securities fraud. She spent three years in a federal penitentiary in Lexington, Ky., liquidated her holdings valued at about $420,000 to repay the government, and agreed to cooperate with the Justice Department's investigation.
Poulsen and another executive, James Happ, are scheduled to stand trial on similar charges later in the year.
Gibson testified under cross-examination that throughout her tenure at National Century she reported mostly to Poulsen. Defense attorneys used that admission to suggest their clients weren't involved in the alleged fraud.
Speer's attorney, Frederick Benton, questioned a meeting Gibson claimed took place in which she told Speer about accounting manipulation at National Century. Benton implied the meeting never happened because Gibson, a prolific note-taker, couldn't produce notes from the meeting, nor could she remember the date of the meeting.
Benton suggested Gibson disliked Speer because he took over National Century's information technology department in 1999 and made changes she didn't like.
Earlier on Monday, defense attorneys raised questions about Gibson's use of alcohol, prescription drugs and visits to a psychiatrist.
Business First of Columbus - by Kevin Kemper Business First
The woman at the center of the government's case against several executives of the defunct National Century Financial Enterprises Inc. testified Monday that the company's CEO told her she would be thrown under the bus if fraud at the company ever came public.
Sherry Gibson, the Dublin company's executive vice president of compliance, said under cross-examination Monday afternoon that National Century chief Lance Poulsen told her he would not accept responsibility if the company was accused of fraud and would shift blame to her. Poulsen's attitude was especially hurtful, Gibson said, because she had always been loyal to her boss.
Gibson previously testified the company kept two sets of books, one accurate and another for investors that had been ginned to show National Century in better financial shape. Gibson said Monday it was primarily she and Poulsen who falsified company documents and investor reports.
Gibson said shortly after that conversation with Poulsen she began keeping copies of documents at her home in an effort to protect herself in case the company unraveled.
National Century was a financier of last resort for health-care providers. The firm specialized in buying receivables from medical businesses at a discount, giving them cash up front so they could pay their bills. It then packaged the receivables as asset-backed bonds and sold them to investors.
The government has accused five executives - Rebecca Parrett, Donald Ayers, Roger Faulkenberry, Randolph Speer and James Dierker - of engaging in conspiracy, money laundering and securities fraud in a scheme that led to the company's $3 billion collapse into bankruptcy in 2002. The executives pleaded not guilty to the charges.
Gibson had been indicted as well, but she pleaded guilty in 2003 to a count of conspiracy to commit securities fraud. She spent three years in a federal penitentiary in Lexington, Ky., liquidated her holdings valued at about $420,000 to repay the government, and agreed to cooperate with the Justice Department's investigation.
Poulsen and another executive, James Happ, are scheduled to stand trial on similar charges later in the year.
Gibson testified under cross-examination that throughout her tenure at National Century she reported mostly to Poulsen. Defense attorneys used that admission to suggest their clients weren't involved in the alleged fraud.
Speer's attorney, Frederick Benton, questioned a meeting Gibson claimed took place in which she told Speer about accounting manipulation at National Century. Benton implied the meeting never happened because Gibson, a prolific note-taker, couldn't produce notes from the meeting, nor could she remember the date of the meeting.
Benton suggested Gibson disliked Speer because he took over National Century's information technology department in 1999 and made changes she didn't like.
Earlier on Monday, defense attorneys raised questions about Gibson's use of alcohol, prescription drugs and visits to a psychiatrist.
Are we really getting the WHole truth and Nothing but the truth?
think not and I will tell you why.....or at least give you a few hints..
Look back at the Welfare Reform passed during the Clinton years! This is where THIS Fraud began!
Then look at the LARGEST CORPORATIONS in our Healthcare system, back in 1996,1997, 1998 that Needed to DUMP their facilities that were not going to be allowed to RAPE the Medicare Medicaid system with their reduced profits after the Medicare Reform Bill was passed.
This is very complicated but simple once the FACTS are knownn. It is just getting to the facts that require a bit of thought. Remember, we are dealing with very manipulative "CORPORATE" Executives.
Look back at the Welfare Reform passed during the Clinton years! This is where THIS Fraud began!
Then look at the LARGEST CORPORATIONS in our Healthcare system, back in 1996,1997, 1998 that Needed to DUMP their facilities that were not going to be allowed to RAPE the Medicare Medicaid system with their reduced profits after the Medicare Reform Bill was passed.
This is very complicated but simple once the FACTS are knownn. It is just getting to the facts that require a bit of thought. Remember, we are dealing with very manipulative "CORPORATE" Executives.
Is this something new for Americans? We are a PILL-Popping NATION!! Thanks to BUG PHARMA of course!!
Maybe one of HCA's "Behavioral" Institutions could have assisted this witness!!!
Monday, February 25, 2008 - 3:25 PM EST
Defense questions witness' alcohol, prescription drug use
Defense lawyers' questioning of the government's star witness in the National Century Financial Enterprises Inc. trial began in earnest Monday morning, with lawyers asking about her alcohol use and visits to a psychiatrist.
Sherry Gibson, National Century's former executive vice president of compliance, testified last week she was at the center of company executives' efforts to lie to investors and divert money. She testified the company kept two sets of books, one accurate and another for investors that had been ginned to show National Century in better financial shape. She said the five executives on trial knew about the arrangement and actively helped to maintain the dual ledgers.
After the government closed its questioning of Gibson Monday morning, defense attorney Javier Armengau began his cross-examination by asking Gibson about a joking presentation about National Century's finances she gave at a company holiday party, where she suggested the company's initials stood for 'No Cash Flow Ever.'
"Just how drunk were you?" Armengau asked.
Gibson replied that she wasn't drunk.
"But alcohol issues plagued you throughout your (National Century) employment, no?" Armengau asked.
Again, Gibson denied she had a problem with alcohol.
Armengau also asked about "psychotic" medications Gibson took during her time at National Century, which Gibson replied were antidepressants.
Another line of questioning dealt with why Gibson remained at National Century until its 2002 collapse. She she could have left the company at any time, but chose to stay. Armengau suggested Gibson told her psychiatrist she felt trapped there and unworthy of working anywhere else. Gibson replied she didn't recall what she had told her doctor.
The government has accused the executives of engaging in conspiracy, money laundering and securities fraud in a scheme that led to the company's bankruptcy in 2002. National Century specialized in purchasing receivables from health-care providers at a discount, giving the providers cash up front so they could pay their bills. The company packaged the receivables as asset-backed bonds and sold them to investors.
Rebecca Parrett, Donald Ayers, Roger Faulkenberry, Randolph Speer and James Dierker have all pleaded not guilty to the charges. If found guilty, they face 30 years to life in prison.
Gibson had been indicted with the executives but pleaded guilty in 2003 to a count of conspiracy to commit securities fraud. She spent three years in a federal penitentiary in Lexington, Ky., liquidated her holdings valued at about $420,000 to repay the government, and agreed to cooperate with the Justice Department's investigation.
Before defense questioning began, Gibson told jurors Monday morning that National Century executives took pride in their deception. She recalled how she and Dierker laughed at Ivy League-educated National Century investors who thought they were smarter than the executives, many of whom went to Ohio colleges and universities.
"(Investors) weren't asking questions and they weren't getting answers," Gibson said.
Gibson is expected to remain on the witness stand Monday as defense attorneys complete their cross-examination.
National Century's CEO Lance Poulsen and James Happ, another company executive, are to stand trial later in the year.
Monday, February 25, 2008 - 3:25 PM EST
Defense questions witness' alcohol, prescription drug use
Defense lawyers' questioning of the government's star witness in the National Century Financial Enterprises Inc. trial began in earnest Monday morning, with lawyers asking about her alcohol use and visits to a psychiatrist.
Sherry Gibson, National Century's former executive vice president of compliance, testified last week she was at the center of company executives' efforts to lie to investors and divert money. She testified the company kept two sets of books, one accurate and another for investors that had been ginned to show National Century in better financial shape. She said the five executives on trial knew about the arrangement and actively helped to maintain the dual ledgers.
After the government closed its questioning of Gibson Monday morning, defense attorney Javier Armengau began his cross-examination by asking Gibson about a joking presentation about National Century's finances she gave at a company holiday party, where she suggested the company's initials stood for 'No Cash Flow Ever.'
"Just how drunk were you?" Armengau asked.
Gibson replied that she wasn't drunk.
"But alcohol issues plagued you throughout your (National Century) employment, no?" Armengau asked.
Again, Gibson denied she had a problem with alcohol.
Armengau also asked about "psychotic" medications Gibson took during her time at National Century, which Gibson replied were antidepressants.
Another line of questioning dealt with why Gibson remained at National Century until its 2002 collapse. She she could have left the company at any time, but chose to stay. Armengau suggested Gibson told her psychiatrist she felt trapped there and unworthy of working anywhere else. Gibson replied she didn't recall what she had told her doctor.
The government has accused the executives of engaging in conspiracy, money laundering and securities fraud in a scheme that led to the company's bankruptcy in 2002. National Century specialized in purchasing receivables from health-care providers at a discount, giving the providers cash up front so they could pay their bills. The company packaged the receivables as asset-backed bonds and sold them to investors.
Rebecca Parrett, Donald Ayers, Roger Faulkenberry, Randolph Speer and James Dierker have all pleaded not guilty to the charges. If found guilty, they face 30 years to life in prison.
Gibson had been indicted with the executives but pleaded guilty in 2003 to a count of conspiracy to commit securities fraud. She spent three years in a federal penitentiary in Lexington, Ky., liquidated her holdings valued at about $420,000 to repay the government, and agreed to cooperate with the Justice Department's investigation.
Before defense questioning began, Gibson told jurors Monday morning that National Century executives took pride in their deception. She recalled how she and Dierker laughed at Ivy League-educated National Century investors who thought they were smarter than the executives, many of whom went to Ohio colleges and universities.
"(Investors) weren't asking questions and they weren't getting answers," Gibson said.
Gibson is expected to remain on the witness stand Monday as defense attorneys complete their cross-examination.
National Century's CEO Lance Poulsen and James Happ, another company executive, are to stand trial later in the year.
Monday, February 25, 2008
began as a temporary secretary and worked her way up over the years to become executive vice president ....WOW!
Star witness: National Century fraud stretched to 1995
bizjournals.com | 2/20/08| Kevin Kemper
Investors, auditors, clients and courts were fed lies by executives at National Century Financial Enterprises Inc. from 1995 until the company's 2002 collapse, the health-care finance company's former executive vice president for compliance testified all day Thursday.
Sherry Gibson, the government's star witness in its criminal fraud case against five former National Century executives, told federal court jurors the company's principals and senior executives were in on a years-long deception that kept what was once the largest health-care financing business in the nation running.
When National Century began overfunding clients for the accounts receivables it bought, it resulted in cascading debt that forced Gibson and others to cook the company's books, lie to investors and auditors, and in some cases give false testimony in courtrooms when the company became involved in business litigation.
Gibson was an insider at National Century. She began working at National Premeire Financial Services, a precursor to National Century, at age 24 after attending Bowling Green State University to study French and Russian. She began as a temporary secretary and worked her way up over the years to become executive vice president of compliance, a role that required her to interact daily with the company's founders - Lance Poulsen, Rebecca Parrett and Donald Ayers.
As head of the compliance department, it was Gibson's job to oversee the creation of investor reports, work with auditors and make presentations to investors about the company's businessmodel. National Century specialized in purchasing receivables from health-care providers at a discount, giving the providers cash up front so they could pay their bills. The company packaged the receivables as asset-backed bonds and sold them to investors.
National Century filed for bankruptcy in November 2002 after a raid on its Dublin office by FBI agents and its bond ratings were cut to high-yield "junk" status because they had become risky for investors.
The government has accused five of its executives of engaging in conspiracy, money laundering and securities fraud in an effort to benefit their own to the tune of more than $2.84 billion.
Parrett, Ayers, Roger Faulkenberry, Randolph Speer and James Dierker have all pleaded not guilty to the charges.
Poulsen and James Happ, another company executive, are to stand trial later in the year. Gibson was also indicted but pleaded guilty in 2003 to a count of conspiracy to commit securities fraud. Since then, she has spent three years in a federal penitentiary in Lexington, Ky., liquidated her holdings, valued at about $420,000, to repay the government, and agreed to cooperate with the Justice Department's investigation of the company.
Gibson told the jury in the Columbus courtroom that Poulsen would not let her department send out required monthly financial reports on company-issued bonds that were not in compliance. As a result, she said the company was forced to make up data to show that bond funds were meeting their covenants, then fabricate backup files for those reports to throw off auditors in the future.
Gibson said the company also changed dates, names and numbers in accounts, keeping "actual" versus "reported" or doctored account reports that were distributed to senior executives. All of those actions were approved of by Poulsen, she said, and began as far back as 1995. Gibson reiterated earlier testimony from other National Century insiders, saying no one, including her, ever told investors about deficiencies in the bond funds.
Information about the company's bond compliance was on a "need to know basis," Gibson said, with the company going so far as to locate her department in a building separate from the rest of the company.
Throughout her testimony, Gibson recounted how with nearly every single false act or accounting sleight of hand, she consulted with Poulsen, Ayers and Parrett or had conversations with the other defendants - Faulkenberry, Speer and Dierker - about overfunded clients or investor report manipulation. (Excerpt)
Posted by FraudBaron on February 22, 2008 12:15 AM
bizjournals.com | 2/20/08| Kevin Kemper
Investors, auditors, clients and courts were fed lies by executives at National Century Financial Enterprises Inc. from 1995 until the company's 2002 collapse, the health-care finance company's former executive vice president for compliance testified all day Thursday.
Sherry Gibson, the government's star witness in its criminal fraud case against five former National Century executives, told federal court jurors the company's principals and senior executives were in on a years-long deception that kept what was once the largest health-care financing business in the nation running.
When National Century began overfunding clients for the accounts receivables it bought, it resulted in cascading debt that forced Gibson and others to cook the company's books, lie to investors and auditors, and in some cases give false testimony in courtrooms when the company became involved in business litigation.
Gibson was an insider at National Century. She began working at National Premeire Financial Services, a precursor to National Century, at age 24 after attending Bowling Green State University to study French and Russian. She began as a temporary secretary and worked her way up over the years to become executive vice president of compliance, a role that required her to interact daily with the company's founders - Lance Poulsen, Rebecca Parrett and Donald Ayers.
As head of the compliance department, it was Gibson's job to oversee the creation of investor reports, work with auditors and make presentations to investors about the company's businessmodel. National Century specialized in purchasing receivables from health-care providers at a discount, giving the providers cash up front so they could pay their bills. The company packaged the receivables as asset-backed bonds and sold them to investors.
National Century filed for bankruptcy in November 2002 after a raid on its Dublin office by FBI agents and its bond ratings were cut to high-yield "junk" status because they had become risky for investors.
The government has accused five of its executives of engaging in conspiracy, money laundering and securities fraud in an effort to benefit their own to the tune of more than $2.84 billion.
Parrett, Ayers, Roger Faulkenberry, Randolph Speer and James Dierker have all pleaded not guilty to the charges.
Poulsen and James Happ, another company executive, are to stand trial later in the year. Gibson was also indicted but pleaded guilty in 2003 to a count of conspiracy to commit securities fraud. Since then, she has spent three years in a federal penitentiary in Lexington, Ky., liquidated her holdings, valued at about $420,000, to repay the government, and agreed to cooperate with the Justice Department's investigation of the company.
Gibson told the jury in the Columbus courtroom that Poulsen would not let her department send out required monthly financial reports on company-issued bonds that were not in compliance. As a result, she said the company was forced to make up data to show that bond funds were meeting their covenants, then fabricate backup files for those reports to throw off auditors in the future.
Gibson said the company also changed dates, names and numbers in accounts, keeping "actual" versus "reported" or doctored account reports that were distributed to senior executives. All of those actions were approved of by Poulsen, she said, and began as far back as 1995. Gibson reiterated earlier testimony from other National Century insiders, saying no one, including her, ever told investors about deficiencies in the bond funds.
Information about the company's bond compliance was on a "need to know basis," Gibson said, with the company going so far as to locate her department in a building separate from the rest of the company.
Throughout her testimony, Gibson recounted how with nearly every single false act or accounting sleight of hand, she consulted with Poulsen, Ayers and Parrett or had conversations with the other defendants - Faulkenberry, Speer and Dierker - about overfunded clients or investor report manipulation. (Excerpt)
Posted by FraudBaron on February 22, 2008 12:15 AM
Hidden cash shortfall
Hidden cash shortfall
Books falsified, former officer testifies
Friday, February 22, 2008 3:09 AM
By Jodi Andes
THE COLUMBUS DISPATCH
There were two sets of books at National Century Financial Enterprises.
One set, the actual books, showed that the company had been short on cash since 1995. Only a few executives of that Dublin-based company were privy to those.
The other set, the financials the rest of the world saw, included numbers that were dreamt up and plugged in monthly, Sherry Gibson, a former executive vice president of the company, testified yesterday.
"I added receivables. I changed the aging categories. I added payor information. I manipulated the reserve accounts," Gibson told jurors in a monotone voice, describing how she falsified the company books.
Investors relied on those books when investing billions of dollars in the health-care financing company.
When National Century filed for bankruptcy in November 2002, investors lost $1.9 billion, making it the largest case of private corporate fraud in the nation's history, prosecutors say.
Gibson, who has spent time in prison after admitting her role in the company's downfall, is a key witness for the prosecution in the ongoing trial of five former company executives.
Initially, she said, those with access to the company's true financials were owners Rebecca S. Parrett, Donald H. Ayers, and Lance K. Poulsen.
But fellow vice presidents Randolph H. Speer, Roger S. Faulkenberry and James E. Dierker were copied on memos about the actual accounting numbers that investors, auditors, rating agencies -- and other company employees -- never knew existed.
Parrett, Ayers, Speer, Faulkenberry, and Dierker are being tried together in federal district court in Columbus on charges of securities fraud, wire fraud and money laundering before Judge Algenon L. Marbley.
Poulsen is expected to be tried separately on similar charges in August.
Gibson pleaded guilty to conspiracy to commit securities fraud during the FBI and IRS investigation of National Century, and became a key government witness against her former co-workers.
She started with the company as a receptionist/secretary when she was 24. At the time, she had no health-care experience, but she learned the complex financing and was deeply loyal to Poulsen, other employees have testified.
Gibson rose to become an executive vice president, earning $150,000 a year.
At 43, she is now a felon having served three years in a federal prison in Kentucky for her crime.
U.S. Department of Justice trial attorney Wes Porter questioned Gibson all day in an examination that drew more than 70 objections from the eight defense attorneys.
The objections, led mostly by defense attorneys Fred Benton and Javier Armengau, averaged one every five minutes during Gibson's six hours of testimony.
Prosecutors have alleged that greed played a role in the company's downfall, but Gibson is the first witness to explain what the perks were like at the company.
The three company owners awarded employees bonuses every three months, as long as the company met its projections. And from 1996 to mid-2002, the company did.
She and the defendants all had the ability to offer health-care providers, such as hospitals and clinics, millions in unsecured loans while earning bonuses on the loans as well.
For example, she earned $25,000 bonuses four times in 2002.
Employees also could earn special bonuses. She received one worth $50,000 and was given a $1 million bonus in potential stock options if National Century ever went public or was sold.
National Century, though, was never sold before it collapsed.
jandes@dispatch.com
Books falsified, former officer testifies
Friday, February 22, 2008 3:09 AM
By Jodi Andes
THE COLUMBUS DISPATCH
There were two sets of books at National Century Financial Enterprises.
One set, the actual books, showed that the company had been short on cash since 1995. Only a few executives of that Dublin-based company were privy to those.
The other set, the financials the rest of the world saw, included numbers that were dreamt up and plugged in monthly, Sherry Gibson, a former executive vice president of the company, testified yesterday.
"I added receivables. I changed the aging categories. I added payor information. I manipulated the reserve accounts," Gibson told jurors in a monotone voice, describing how she falsified the company books.
Investors relied on those books when investing billions of dollars in the health-care financing company.
When National Century filed for bankruptcy in November 2002, investors lost $1.9 billion, making it the largest case of private corporate fraud in the nation's history, prosecutors say.
Gibson, who has spent time in prison after admitting her role in the company's downfall, is a key witness for the prosecution in the ongoing trial of five former company executives.
Initially, she said, those with access to the company's true financials were owners Rebecca S. Parrett, Donald H. Ayers, and Lance K. Poulsen.
But fellow vice presidents Randolph H. Speer, Roger S. Faulkenberry and James E. Dierker were copied on memos about the actual accounting numbers that investors, auditors, rating agencies -- and other company employees -- never knew existed.
Parrett, Ayers, Speer, Faulkenberry, and Dierker are being tried together in federal district court in Columbus on charges of securities fraud, wire fraud and money laundering before Judge Algenon L. Marbley.
Poulsen is expected to be tried separately on similar charges in August.
Gibson pleaded guilty to conspiracy to commit securities fraud during the FBI and IRS investigation of National Century, and became a key government witness against her former co-workers.
She started with the company as a receptionist/secretary when she was 24. At the time, she had no health-care experience, but she learned the complex financing and was deeply loyal to Poulsen, other employees have testified.
Gibson rose to become an executive vice president, earning $150,000 a year.
At 43, she is now a felon having served three years in a federal prison in Kentucky for her crime.
U.S. Department of Justice trial attorney Wes Porter questioned Gibson all day in an examination that drew more than 70 objections from the eight defense attorneys.
The objections, led mostly by defense attorneys Fred Benton and Javier Armengau, averaged one every five minutes during Gibson's six hours of testimony.
Prosecutors have alleged that greed played a role in the company's downfall, but Gibson is the first witness to explain what the perks were like at the company.
The three company owners awarded employees bonuses every three months, as long as the company met its projections. And from 1996 to mid-2002, the company did.
She and the defendants all had the ability to offer health-care providers, such as hospitals and clinics, millions in unsecured loans while earning bonuses on the loans as well.
For example, she earned $25,000 bonuses four times in 2002.
Employees also could earn special bonuses. She received one worth $50,000 and was given a $1 million bonus in potential stock options if National Century ever went public or was sold.
National Century, though, was never sold before it collapsed.
jandes@dispatch.com
Friday, February 22, 2008
Former healthcare executive says company misled investors
Associated Press - February 21, 2008 12:05 PM ET
COLUMBUS, Ohio (AP) - A former executive of a failed health care finance company says the company withheld financial information from its investors.
Sherry Gibson testified Thursday in federal court in the government's securities fraud case against five former owners and executives of National Century Financial Enterprises.
The government alleges the five schemed to defraud investors of $1.9 billion.
Gibson told jurors she told investors "absolutely nothing" about National Century's practices of advancing cash to Memphis, Tenn.-based Medshares, a home-health care provider.
She said other top officials, including those on trial or facing similar charges, also misled investors.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed
COLUMBUS, Ohio (AP) - A former executive of a failed health care finance company says the company withheld financial information from its investors.
Sherry Gibson testified Thursday in federal court in the government's securities fraud case against five former owners and executives of National Century Financial Enterprises.
The government alleges the five schemed to defraud investors of $1.9 billion.
Gibson told jurors she told investors "absolutely nothing" about National Century's practices of advancing cash to Memphis, Tenn.-based Medshares, a home-health care provider.
She said other top officials, including those on trial or facing similar charges, also misled investors.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed
Looks like we might have a judge that is really paying attention!!
Talbot acknowledged National Century's financing kept her company's hospitals in business. Doctors Community Health Care Corp Doctors Community Health Care Corp., hmmmmmm
U.S. District Court Judge Algenon L. Marbley
"In a case as complex as this, it is easy to confuse, unwittingly, the trier of fact (jury)," Marbley said after the jury had been sent out of the courtroom. "This borders on the brink of surplusage."
(Webster: Surplusage-irrelevant or superfluous words or matter)
After admonishing Dickerson to make his questions relevant, Marbley said, "I'm not going to let confusion creep into this trial."
Excerpts from:
Wednesday, February 20, 2008 - 5:00 PM EST
National Century overpaid hospital operator by half-billion dollarsBusiness First of Columbus - by Kevin Kemper Business First
U.S. District Court Judge Algenon L. Marbley
"In a case as complex as this, it is easy to confuse, unwittingly, the trier of fact (jury)," Marbley said after the jury had been sent out of the courtroom. "This borders on the brink of surplusage."
(Webster: Surplusage-irrelevant or superfluous words or matter)
After admonishing Dickerson to make his questions relevant, Marbley said, "I'm not going to let confusion creep into this trial."
Excerpts from:
Wednesday, February 20, 2008 - 5:00 PM EST
National Century overpaid hospital operator by half-billion dollarsBusiness First of Columbus - by Kevin Kemper Business First
"....overpaid some of its medical clients" . Should we believe the 'overpayments' were UNintentional?
National Century Financial Enterprises Inc. overfunded an operator of five hospitals around the country by approximately $500 million, a health-care executive testified Wednesday.
Donna Talbot, a former executive vice president of Doctors Community Health Care Corp., told the jury assembled for the trial of five National Century executives in Columbus that her company owed National Century approximately $500 million due to overfunding by the time National Century filed for bankruptcy in 2002.
Talbot became the third health-care executive from as many companies to testify that National Century had overpaid some of its medical clients.
Talbot also said National Century owned 11.5 percent of Scottsdale, Ariz.-based Doctors Community.
National Century was a Dublin-based financier of health care providers. The largest of its kind in the nation, National Century specialized in purchasing accounts receivable from health-care providers at a discount, giving the providers cash up front to pay bills. It packaged the receivables as asset-backed bonds and sold them to investors.
National Century filed for bankruptcy in November 2002 after FBI agents raided the company's offices and its bond ratings were cut to high-yield "junk" status because they had become risky for investors.
The government has accused the five executives on trial of engaging in conspiracy, money laundering and securities fraud in an effort to benefit their own to the tune of more than $2.84 billion.
All of them - Rebecca Parrett, Donald Ayers, Roger Faulkenberry, Randolph Speer and James Dierker - have pleaded not guilty.
Two other executives - CEO Lance Poulsen and James Happ - will stand trial later in the year.
Under cross-examination by defense attorneys, Talbot acknowledged National Century's financing kept her company's hospitals in business.
Brian Dickerson, attorney for Ayers, also questioned Talbot on equipment financing contracts between National Century and Doctors Community, which U.S. District Court Judge Algenon L. Marbley called into question.
"In a case as complex as this, it is easy to confuse, unwittingly, the trier of fact (jury)," Marbley said after the jury had been sent out of the courtroom. "This borders on the brink of surplusage."
After admonishing Dickerson to make his questions relevant, Marbley said, "I'm not going to let confusion creep into this trial."
Donna Talbot, a former executive vice president of Doctors Community Health Care Corp., told the jury assembled for the trial of five National Century executives in Columbus that her company owed National Century approximately $500 million due to overfunding by the time National Century filed for bankruptcy in 2002.
Talbot became the third health-care executive from as many companies to testify that National Century had overpaid some of its medical clients.
Talbot also said National Century owned 11.5 percent of Scottsdale, Ariz.-based Doctors Community.
National Century was a Dublin-based financier of health care providers. The largest of its kind in the nation, National Century specialized in purchasing accounts receivable from health-care providers at a discount, giving the providers cash up front to pay bills. It packaged the receivables as asset-backed bonds and sold them to investors.
National Century filed for bankruptcy in November 2002 after FBI agents raided the company's offices and its bond ratings were cut to high-yield "junk" status because they had become risky for investors.
The government has accused the five executives on trial of engaging in conspiracy, money laundering and securities fraud in an effort to benefit their own to the tune of more than $2.84 billion.
All of them - Rebecca Parrett, Donald Ayers, Roger Faulkenberry, Randolph Speer and James Dierker - have pleaded not guilty.
Two other executives - CEO Lance Poulsen and James Happ - will stand trial later in the year.
Under cross-examination by defense attorneys, Talbot acknowledged National Century's financing kept her company's hospitals in business.
Brian Dickerson, attorney for Ayers, also questioned Talbot on equipment financing contracts between National Century and Doctors Community, which U.S. District Court Judge Algenon L. Marbley called into question.
"In a case as complex as this, it is easy to confuse, unwittingly, the trier of fact (jury)," Marbley said after the jury had been sent out of the courtroom. "This borders on the brink of surplusage."
After admonishing Dickerson to make his questions relevant, Marbley said, "I'm not going to let confusion creep into this trial."
Thursday, February 21, 2008
National Century fraud stretched to 1995
Thursday, February 21, 2008 - 2:12 PM EST
Star witness: National Century fraud stretched to 1995
Business First of Columbus - by Kevin Kemper Business First
Print Article Email Article Reprints RSS Feeds Add to Del.icio.us Digg This
Related News
National Century overpaid hospital operator by half-billion dollars [Columbus]
Witness: National Century owed investment firm $183 million [Columbus]
Witnesses in National Century trial allege executives lied to investors [Columbus]
Investors, auditors, clients and courts were fed lies by executives at National Century Financial Enterprises Inc. from 1995 until the company's 2002 collapse, the health-care finance company's former executive vice president for compliance testified Thursday morning.
Sherry Gibson, the government's star witness in its criminal fraud case against five former National Century executives, told federal court jurors the company's principals and senior executives were in on a years-long deception that kept what was once the largest health-care financing business in the nation running.
When National Century began overfunding clients for the accounts receivables it bought, it resulted in cascading debt that forced Gibson and others to cook the company's books, lie to investors and auditors, and in some cases give false testimony in courtrooms when the company became involved in business litigation.
Gibson was an insider at National Century. She began working at National Premeire Financial Services, a precursor to National Century, at age 24 after attending Bowling Green State University to study French and Russian. She began as a temporary secretary and worked her way up over the years to become executive vice president of compliance, a role that required her to interact daily with the company's founders - Lance Poulsen, Rebecca Parrett and Donald Ayers.
As head of the compliance department, it was Gibson's job to oversee the creation of investor reports, work with auditors and make presentations to investors about the company's business model.
National Century specialized in purchasing receivables from health-care providers at a discount, giving the providers cash up front so they could pay their bills. The company packaged the receivables as asset-backed bonds and sold them to investors.
National Century filed for bankruptcy in November 2002 after a raid on its Dublin office by FBI agents and its bond ratings were cut to high-yield "junk" status because they had become risky for investors.
The government has accused five of its executives of engaging in conspiracy, money laundering and securities fraud in an effort to benefit their own to the tune of more than $2.84 billion.
Parrett, Ayers, Roger Faulkenberry, Randolph Speer and James Dierker have all pleaded not guilty to the charges.
Poulsen and James Happ, another company executive, are to stand trial later in the year.
Gibson was also indicted but pleaded guilty in 2003 to a count of conspiracy to commit securities fraud. Since then, she has spent three years in a federal penitentiary in Lexington, Ky., liquidated her holdings, valued at about $420,000, to repay the government, and agreed to cooperate with the Justice Department's investigation of the company.
Gibson told the jury in the Columbus courtroom that Poulsen would not let her department send out required monthly financial reports on company-issued bonds that were not in compliance. As a result, she said the company was forced to make up data to show that bond funds were meeting their covenants, then fabricate backup files for those reports to throw off auditors in the future.
All of those actions were approved of by Poulsen, she said, and began as far back as 1995.
Gibson reiterated earlier testimony from other National Century insiders, saying no one, including her, ever told investors about deficiencies in the bond funds.
Information about the company's bond compliance was on a "need to know basis," Gibson said, with the company going so far as to locate her department in a building separate from the rest of the company.
Gibson is expected to continue her testimony this afternoon.
Star witness: National Century fraud stretched to 1995
Business First of Columbus - by Kevin Kemper Business First
Print Article Email Article Reprints RSS Feeds Add to Del.icio.us Digg This
Related News
National Century overpaid hospital operator by half-billion dollars [Columbus]
Witness: National Century owed investment firm $183 million [Columbus]
Witnesses in National Century trial allege executives lied to investors [Columbus]
Investors, auditors, clients and courts were fed lies by executives at National Century Financial Enterprises Inc. from 1995 until the company's 2002 collapse, the health-care finance company's former executive vice president for compliance testified Thursday morning.
Sherry Gibson, the government's star witness in its criminal fraud case against five former National Century executives, told federal court jurors the company's principals and senior executives were in on a years-long deception that kept what was once the largest health-care financing business in the nation running.
When National Century began overfunding clients for the accounts receivables it bought, it resulted in cascading debt that forced Gibson and others to cook the company's books, lie to investors and auditors, and in some cases give false testimony in courtrooms when the company became involved in business litigation.
Gibson was an insider at National Century. She began working at National Premeire Financial Services, a precursor to National Century, at age 24 after attending Bowling Green State University to study French and Russian. She began as a temporary secretary and worked her way up over the years to become executive vice president of compliance, a role that required her to interact daily with the company's founders - Lance Poulsen, Rebecca Parrett and Donald Ayers.
As head of the compliance department, it was Gibson's job to oversee the creation of investor reports, work with auditors and make presentations to investors about the company's business model.
National Century specialized in purchasing receivables from health-care providers at a discount, giving the providers cash up front so they could pay their bills. The company packaged the receivables as asset-backed bonds and sold them to investors.
National Century filed for bankruptcy in November 2002 after a raid on its Dublin office by FBI agents and its bond ratings were cut to high-yield "junk" status because they had become risky for investors.
The government has accused five of its executives of engaging in conspiracy, money laundering and securities fraud in an effort to benefit their own to the tune of more than $2.84 billion.
Parrett, Ayers, Roger Faulkenberry, Randolph Speer and James Dierker have all pleaded not guilty to the charges.
Poulsen and James Happ, another company executive, are to stand trial later in the year.
Gibson was also indicted but pleaded guilty in 2003 to a count of conspiracy to commit securities fraud. Since then, she has spent three years in a federal penitentiary in Lexington, Ky., liquidated her holdings, valued at about $420,000, to repay the government, and agreed to cooperate with the Justice Department's investigation of the company.
Gibson told the jury in the Columbus courtroom that Poulsen would not let her department send out required monthly financial reports on company-issued bonds that were not in compliance. As a result, she said the company was forced to make up data to show that bond funds were meeting their covenants, then fabricate backup files for those reports to throw off auditors in the future.
All of those actions were approved of by Poulsen, she said, and began as far back as 1995.
Gibson reiterated earlier testimony from other National Century insiders, saying no one, including her, ever told investors about deficiencies in the bond funds.
Information about the company's bond compliance was on a "need to know basis," Gibson said, with the company going so far as to locate her department in a building separate from the rest of the company.
Gibson is expected to continue her testimony this afternoon.
Wednesday, February 20, 2008
just before the company fell into bankruptcy, National Century bonds were good investments,
Witness: National Century owed investment firm $183 million
Tuesday, February 19, 2008 - 5:52 PM EST
The weeks preceding National Century Financial Enterprises Inc.'s collapse included heated exchanges between investors and CEO Lance Poulsen, an investment manager testified Tuesday in the fraud trial for five company executives.
Amy Boothe-Fuentes, a former executive at AllianceBernstein Holding LP, told jurors that when her New York firm and other investors became concerned by a warning from Poulsen that National Century's bond funds had fallen out of compliance with financial covenants, they visited the company's Dublin headquarters only to have Poulsen kick them out and threaten to call the police.
Boothe-Fuentes, a witness for the Justice Department, was in charge of researching potential investments for AllianceBernstein's institutional clients, such as pension funds. AllianceBernstein invested in National Century bonds in 2000, she said, because they were considered safe and reliable. National Century bonds had attained AAA ratings from agencies such as Fitch Inc. and Moody's Investors Service because the company was considered the expert in health-care receivables and raters saw little chance of a default.
Indeed, until mid-2002, just before the company fell into bankruptcy, National Century bonds were good investments, Boothe-Fuentes testified in federal court. But in mid-October, Poulsen called to ask AllianceBernstein to sign a waiver that would allow National Century's NPF VI Inc. and NPF XII Inc. bond funds to go out of compliance, she told the jury. After the call, National Century investors formed a committee to investigate the problem, hired forensic accountants and lawyers, and traveled to Dublin to meet with National Century executives a few days later, she said.
After committee members arrived, Boothe-Fuentes said she tried to join a meeting Poulsen was having with another investor. She could hear Poulsen yelling, so she knocked on the door in hopes of joining the meeting, but Poulsen refused to let her into the office. He then kicked the investor committee out of National Century's offices, she testified.
The next day, Boothe-Fuentes said, Poulsen led a meeting with investors where he explained that the NPF VI and NPF XII funds were depleted and needed money from investors. Poulsen told them that if they didn't contribute more, National Century's health-care clients likely would stop sending in money for receivables that National Century purchased.
Bryan Weiss, former chief financial officer of Los Angeles-based MediManagement, testified earlier in the trial that when National Century stopped sending it advances on its health-care receivables in October 2002, he rerouted money that should have gone to National Century back into MediManagement's bank accounts so it could keep its California hospital and clinics running.
Boothe-Fuentes said National Century owed AllianceBernstein about $183 million when it failed. She also testified that AllianceBernstein probably wouldn't have invested in the NPF funds had she known MediManagement was owned by Poulsen and two other National Century executives.
"It's relevant information you would need to know," she said.
Under questioning from defense lawyers, Boothe-Fuentes became visibly frustrated at times with detailed queries into past conversations she couldn't recall. Defense attorneys got her to tell jurors she knew nothing about health-care receivables before joining AllianceBernstein. She also testified she did little to find more information about receivables or the inner workings of National Century during her due diligence examination on the company.
National Century bought accounts receivable from medical providers at a discount, packaging the receivables as bonds and selling the securities to investors while collecting on its customers' bills. The Justice Department has accused the executives of using those accounts to defraud investors and divert money for their own benefit.
Five company executives are facing criminal fraud, conspiracy and money laundering charges: Rebecca Parrett, Donald Ayers, Randolph Speer, Roger Faulkenberry and James Dierker. Poulsen and executive James Happ are scheduled to be tried separately later this year.
All of the executives have denied the charges.
Tuesday, February 19, 2008 - 5:52 PM EST
The weeks preceding National Century Financial Enterprises Inc.'s collapse included heated exchanges between investors and CEO Lance Poulsen, an investment manager testified Tuesday in the fraud trial for five company executives.
Amy Boothe-Fuentes, a former executive at AllianceBernstein Holding LP, told jurors that when her New York firm and other investors became concerned by a warning from Poulsen that National Century's bond funds had fallen out of compliance with financial covenants, they visited the company's Dublin headquarters only to have Poulsen kick them out and threaten to call the police.
Boothe-Fuentes, a witness for the Justice Department, was in charge of researching potential investments for AllianceBernstein's institutional clients, such as pension funds. AllianceBernstein invested in National Century bonds in 2000, she said, because they were considered safe and reliable. National Century bonds had attained AAA ratings from agencies such as Fitch Inc. and Moody's Investors Service because the company was considered the expert in health-care receivables and raters saw little chance of a default.
Indeed, until mid-2002, just before the company fell into bankruptcy, National Century bonds were good investments, Boothe-Fuentes testified in federal court. But in mid-October, Poulsen called to ask AllianceBernstein to sign a waiver that would allow National Century's NPF VI Inc. and NPF XII Inc. bond funds to go out of compliance, she told the jury. After the call, National Century investors formed a committee to investigate the problem, hired forensic accountants and lawyers, and traveled to Dublin to meet with National Century executives a few days later, she said.
After committee members arrived, Boothe-Fuentes said she tried to join a meeting Poulsen was having with another investor. She could hear Poulsen yelling, so she knocked on the door in hopes of joining the meeting, but Poulsen refused to let her into the office. He then kicked the investor committee out of National Century's offices, she testified.
The next day, Boothe-Fuentes said, Poulsen led a meeting with investors where he explained that the NPF VI and NPF XII funds were depleted and needed money from investors. Poulsen told them that if they didn't contribute more, National Century's health-care clients likely would stop sending in money for receivables that National Century purchased.
Bryan Weiss, former chief financial officer of Los Angeles-based MediManagement, testified earlier in the trial that when National Century stopped sending it advances on its health-care receivables in October 2002, he rerouted money that should have gone to National Century back into MediManagement's bank accounts so it could keep its California hospital and clinics running.
Boothe-Fuentes said National Century owed AllianceBernstein about $183 million when it failed. She also testified that AllianceBernstein probably wouldn't have invested in the NPF funds had she known MediManagement was owned by Poulsen and two other National Century executives.
"It's relevant information you would need to know," she said.
Under questioning from defense lawyers, Boothe-Fuentes became visibly frustrated at times with detailed queries into past conversations she couldn't recall. Defense attorneys got her to tell jurors she knew nothing about health-care receivables before joining AllianceBernstein. She also testified she did little to find more information about receivables or the inner workings of National Century during her due diligence examination on the company.
National Century bought accounts receivable from medical providers at a discount, packaging the receivables as bonds and selling the securities to investors while collecting on its customers' bills. The Justice Department has accused the executives of using those accounts to defraud investors and divert money for their own benefit.
Five company executives are facing criminal fraud, conspiracy and money laundering charges: Rebecca Parrett, Donald Ayers, Randolph Speer, Roger Faulkenberry and James Dierker. Poulsen and executive James Happ are scheduled to be tried separately later this year.
All of the executives have denied the charges.
Just the beginning of the REAL COVERUP
Tuesday, February 19, 2008 - 5:52 PM EST
Witness: National
The weeks preceding National Century Financial Enterprises Inc.'s collapse included heated exchanges between investors and CEO Lance Poulsen, an investment manager testified Tuesday in the fraud trial for five company executives.
Amy Boothe-Fuentes, a former executive at AllianceBernstein Holding LP, told jurors that when her New York firm and other investors became concerned by a warning from Poulsen that National Century's bond funds had fallen out of compliance with financial covenants, they visited the company's Dublin headquarters only to have Poulsen kick them out and threaten to call the police.
Boothe-Fuentes, a witness for the Justice Department, was in charge of researching potential investments for AllianceBernstein's institutional clients, such as pension funds. AllianceBernstein invested in National Century bonds in 2000, she said, because they were considered safe and reliable. National Century bonds had attained AAA ratings from agencies such as Fitch Inc. and Moody's Investors Service because the company was considered the expert in health-care receivables and raters saw little chance of a default.
Indeed, until mid-2002, just before the company fell into bankruptcy, National Century bonds were good investments, Boothe-Fuentes testified in federal court. But in mid-October, Poulsen called to ask AllianceBernstein to sign a waiver that would allow National Century's NPF VI Inc. and NPF XII Inc. bond funds to go out of compliance, she told the jury. After the call, National Century investors formed a committee to investigate the problem, hired forensic accountants and lawyers, and traveled to Dublin to meet with National Century executives a few days later, she said.
After committee members arrived, Boothe-Fuentes said she tried to join a meeting Poulsen was having with another investor. She could hear Poulsen yelling, so she knocked on the door in hopes of joining the meeting, but Poulsen refused to let her into the office. He then kicked the investor committee out of National Century's offices, she testified.
The next day, Boothe-Fuentes said, Poulsen led a meeting with investors where he explained that the NPF VI and NPF XII funds were depleted and needed money from investors. Poulsen told them that if they didn't contribute more, National Century's health-care clients likely would stop sending in money for receivables that National Century purchased.
Bryan Weiss, former chief financial officer of Los Angeles-based MediManagement, testified earlier in the trial that when National Century stopped sending it advances on its health-care receivables in October 2002, he rerouted money that should have gone to National Century back into MediManagement's bank accounts so it could keep its California hospital and clinics running.
Boothe-Fuentes said National Century owed AllianceBernstein about $183 million when it failed. She also testified that AllianceBernstein probably wouldn't have invested in the NPF funds had she known MediManagement was owned by Poulsen and two other National Century executives.
"It's relevant information you would need to know," she said.
Under questioning from defense lawyers, Boothe-Fuentes became visibly frustrated at times with detailed queries into past conversations she couldn't recall. Defense attorneys got her to tell jurors she knew nothing about health-care receivables before joining AllianceBernstein. She also testified she did little to find more information about receivables or the inner workings of National Century during her due diligence examination on the company.
National Century bought accounts receivable from medical providers at a discount, packaging the receivables as bonds and selling the securities to investors while collecting on its customers' bills. The Justice Department has accused the executives of using those accounts to defraud investors and divert money for their own benefit.
Five company executives are facing criminal fraud, conspiracy and money laundering charges: Rebecca Parrett, Donald Ayers, Randolph Speer, Roger Faulkenberry and James Dierker. Poulsen and executive James Happ are scheduled to be tried separately later this year.
All of the executives have denied the charges.
Witness: National
The weeks preceding National Century Financial Enterprises Inc.'s collapse included heated exchanges between investors and CEO Lance Poulsen, an investment manager testified Tuesday in the fraud trial for five company executives.
Amy Boothe-Fuentes, a former executive at AllianceBernstein Holding LP, told jurors that when her New York firm and other investors became concerned by a warning from Poulsen that National Century's bond funds had fallen out of compliance with financial covenants, they visited the company's Dublin headquarters only to have Poulsen kick them out and threaten to call the police.
Boothe-Fuentes, a witness for the Justice Department, was in charge of researching potential investments for AllianceBernstein's institutional clients, such as pension funds. AllianceBernstein invested in National Century bonds in 2000, she said, because they were considered safe and reliable. National Century bonds had attained AAA ratings from agencies such as Fitch Inc. and Moody's Investors Service because the company was considered the expert in health-care receivables and raters saw little chance of a default.
Indeed, until mid-2002, just before the company fell into bankruptcy, National Century bonds were good investments, Boothe-Fuentes testified in federal court. But in mid-October, Poulsen called to ask AllianceBernstein to sign a waiver that would allow National Century's NPF VI Inc. and NPF XII Inc. bond funds to go out of compliance, she told the jury. After the call, National Century investors formed a committee to investigate the problem, hired forensic accountants and lawyers, and traveled to Dublin to meet with National Century executives a few days later, she said.
After committee members arrived, Boothe-Fuentes said she tried to join a meeting Poulsen was having with another investor. She could hear Poulsen yelling, so she knocked on the door in hopes of joining the meeting, but Poulsen refused to let her into the office. He then kicked the investor committee out of National Century's offices, she testified.
The next day, Boothe-Fuentes said, Poulsen led a meeting with investors where he explained that the NPF VI and NPF XII funds were depleted and needed money from investors. Poulsen told them that if they didn't contribute more, National Century's health-care clients likely would stop sending in money for receivables that National Century purchased.
Bryan Weiss, former chief financial officer of Los Angeles-based MediManagement, testified earlier in the trial that when National Century stopped sending it advances on its health-care receivables in October 2002, he rerouted money that should have gone to National Century back into MediManagement's bank accounts so it could keep its California hospital and clinics running.
Boothe-Fuentes said National Century owed AllianceBernstein about $183 million when it failed. She also testified that AllianceBernstein probably wouldn't have invested in the NPF funds had she known MediManagement was owned by Poulsen and two other National Century executives.
"It's relevant information you would need to know," she said.
Under questioning from defense lawyers, Boothe-Fuentes became visibly frustrated at times with detailed queries into past conversations she couldn't recall. Defense attorneys got her to tell jurors she knew nothing about health-care receivables before joining AllianceBernstein. She also testified she did little to find more information about receivables or the inner workings of National Century during her due diligence examination on the company.
National Century bought accounts receivable from medical providers at a discount, packaging the receivables as bonds and selling the securities to investors while collecting on its customers' bills. The Justice Department has accused the executives of using those accounts to defraud investors and divert money for their own benefit.
Five company executives are facing criminal fraud, conspiracy and money laundering charges: Rebecca Parrett, Donald Ayers, Randolph Speer, Roger Faulkenberry and James Dierker. Poulsen and executive James Happ are scheduled to be tried separately later this year.
All of the executives have denied the charges.
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