Convicted!!

National Century case
Prosecutors had experience in notable cases
Thursday, March 27, 2008 4:19 PM
By Jodi Andes

THE COLUMBUS DISPATCH
For nearly two weeks, legal eyes focused on the man who presided over a company involved in the nation’s largest private-sector fraud case.

Lance K. Poulsen, a founder and former president of National Century Financial Enterprises, was convicted Wednesday of trying to intimidate a key witness in the fraud case against him.

Also convicted was Karl A. Demmler, a friend of Poulsen’s who served as a middleman with the witness.

National Century, based in Dublin, provided financing to health-care providers. As a result of its collapse, investors lost $1.9 billion, and 350 local employees lost their jobs.

Two federal prosecutors in the witness-intimidation trial are no strangers to high-profile cases.

Leo Wise, a trial attorney for the Department of Justice, was one of seven prosecutors who tried top Enron Corp. executives during a four-month trial in Houston in 2006.

Enron, an energy trader, was the nation's seventh-largest company. Its collapse in 2001 wiped out more than $60 billion in market value and more than $2 billion in employees’ retirement savings, along with thousands of jobs. Kenneth Lay was Enron’s founder, Jeffrey Skilling its chief executive.

Wise could not comment on the Enron trial, because of Justice Department policy.

But the Enron and National Century cases were similar in that both companies duped auditors and investors in part because their companies were revolutionary: Enron in the energy market, National Century in health-care financing.

Skilling and Lay were convicted on fraud and conspiracy charges. Skilling was sentenced to 24 years and four months in a federal prison; Lay died of heart disease before he could be sentenced.

Assistant U.S. Attorney Doug Squires prosecuted Roger D. Blackwell, a well-known Ohio State University business professor, in 2005.

That case, too, bore similarities to the Poulsen trial.

“Both defendants took the stand, and both lied,” Squires said. Both were “extremely intelligent and sophisticated,” and both had skilled defense attorneys.

Blackwell was a board member of Worthington Foods when it was being purchased by the Kellogg Co. Squires was on the team that proved he had tipped off 14 relatives and friends to the purchase, allowing them to make profits of $890,000 on the stock.

Blackwell was convicted on 19 counts of insider trading and conspiracy, sentenced to six years in prison and ordered to pay a $1 million fine.

Despite the attention granted certain cases, “high-profile fraud is no different than street crime,” Squires said. “At the end of the day, everyone is equal under the law, rich or poor.”

jandes@dispatch.com