All guilty on all charges in National Century trial

All guilty on all charges in National Century trial
Each of the former executives faces a minimum sentence of 20 years in prison
Thursday, March 13, 2008 4:45 PM
By Jodi Andes

THE COLUMBUS DISPATCH

All five defendants in the nation’s largest private-sector fraud case have been convicted on all charges connected with the collapse of National Century Financial Enterprises.

Shortly after 4 p.m. in U.S. District Court, the guilty verdicts were announced against Rebecca S. Parrett, Donald H. Ayers, Roger S. Faulkenberry, Randolph H. Speer and James E. Dierker Jr.

By 4:30, 40 guilty verdicts had been announced: eight for Ayers, nine for Parrett, 11 for Speer, eight for Faulkenberry and four for Dierker. The charges included securities and wire fraud, conspiracy to commit fraud, and money laundering.

The maximum sentence for each count of securities fraud and conspiracy to commit securities fraud is five years in prison; wire fraud, conspiracy to commit money laundering and money laundering each carry a potential 20-year sentence.

The verdicts were reached about 2 p.m. after 11 hours of deliberation in a trial that lasted more than five weeks before Judge Algenon L. Marbley.

Marbley said today that the prison sentences would range from a minimum of 20 years for each defendant to a maximum of 140 years for Speer, 85 for Faulkenberry, 75 for Parrett, 65 for Dierker and 55 for Ayers.

The five defendants were executives with National Century prior to the Dublin-based company filing for bankruptcy in November 2002. At least 275 health-care companies collapsed in its wake, and investors lost $1.9 billion.

Ayers, Parrett and Lance K. 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' debt, or accounts receivable, and give them 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 was collected.

Prosecutors alleged that criminal practices led to National Century’s demise. The former executives were accused of falsifying financial reports, giving companies money without formalized loans and using millions for their own lavish lifestyles.

Poulsen is scheduled for a separate trial on 13 counts of fraud in August. He and Karl A. Demmler, who did not work for National Century, are set for a trial expected to start Monday on witness-tampering charges related to the case.

A seventh National Century executive, James K. Happ, is scheduled for trial on fraud charges in October.

jandes@dispatch.com