Fate of chairman, friend up to jury

Fate of chairman, friend up to jury
Defense denies pair swayed main witness in fraud trial
Wednesday, March 26, 2008 3:12 AM
By Jodi Andes

THE COLUMBUS DISPATCH
By the end of the day, the co-founder of National Century Financial Enterprises could be a felon or closer to becoming a free man.

Lance K. Poulsen, who founded the health-care financing company and served as chairman, chief executive and president, and his friend Karl A. Demmler have been on trial for conspiracy, obstruction of justice and two counts of witness tampering.

They're accused of actions aimed at swaying the testimony of Sherry Gibson, a former National Century executive. She is considered a key witness against Poulsen in his upcoming trial in connection with the company's bankruptcy in 2002 and a resulting loss to investors of more than $1.9 billion.

The witness-tampering case, being conducted in U.S. District Court in Columbus, was handed over late yesterday afternoon to the seven-woman, five-man jury. Deliberations are expected to resume this morning.

If convicted in this case, Poulsen, 64, and Demmler, 57, could be sentenced to a maximum of 35 years in prison.

Poulsen is to be tried on the fraud charges in the summer.

Nine other executives have been convicted or pleaded guilty in National Century's collapse. Only Poulsen and executive James Happ still await trial. However, Poulsen was the only defendant that federal Judge Algenon L. Marbley jailed pending trial, and the witness-tampering charges were a major reason, Marbley said last year.

Poulsen is accused of using Demmler as a middleman to encourage Gibson, a former National Century vice president, not to testify against Poulsen. Gibson pleaded guilty in 2003 to falsifying National Century records, went to prison and became the government's key witness in the fraud case.

The government's case against Poulsen and Demmler was based largely on wiretapped conversations between the two and between Demmler and Gibson.

In his closing yesterday, Prosecutor Leo Wise recited from one of the taped conversations in which Demmler told Gibson: "Put it this way: Next time it rains, slip and fall down. You don't remember nothing.' "

"Mr. Poulsen wanted to buy justice, but justice isn't for sale," Wise said.

Poulsen took the stand in his defense Monday, acknowledging that he had agreed when Demmler said he told Gibson to forget.

"He tried to explain it all away," Wise said. "He didn't because he couldn't."

Defense attorneys told the jurors to focus on other facts about the alleged bribes. Peter C. Anderson, one of Poulsen's three attorneys, pointed out that no money ever changed hands, that Poulsen and Gibson did not communicate directly, and that no testimony was ever changed.

Poulsen "was trying to set the record straight," Anderson said. "He was indicted based on suspicious comments."

Poulsen acted on the advice of his attorney and offered money only to help Gibson get a new attorney, Anderson said.

But Thomas Tyack, then Poulsen's attorney, testified that he told Poulsen he shouldn't loan Gibson money, Wise said.

Darryl Harper, Demmler's attorney, said that Gibson misunderstood the discussions with Demmler. "It was a continuation of a conversation she had with Demmler in prison," Harper said.

Demmler visited Gibson in prison and told her he thought she had been railroaded and could have her conviction overturned, Harper said. Demmler, a former owner of the Bogey Inn in Dublin, did not take the stand in his defense.

jandes@dispatch.com



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