James Dierker, Facing the possibility of a prison sentence

Thursday, March 6, 2008 - 3:11 PM EST
National Century defendant takes the stand
Business First of Columbus - by Kevin Kemper Business First


Facing the possibility of a prison sentence, a former National Century Financial Enterprises Inc. executive testified in his defense Thursday, denying he was involved in a government-alleged $3 billion fraud.

James Dierker, vice president of marketing before the company collapsed in 2002, told the 15-member jury at the Joseph P. Kinneary Federal Courthouse in Columbus that he never broke securities laws or conspired to break the law during his nearly four years at the Dublin health-care financing company.

The government has charged Dierker, 40, with two counts of concealing money laundering and a count each of conspiracy and money laundering conspiracy in connection with National Century's bankruptcy. He has been standing trial for more than a month with former executives Rebecca Parrett, Donald Ayers, Roger Faulkenberry and Randolph Speer. They have pleaded not guilty. Dierker is the only one scheduled to testify in the trial.

Dierker told jurors he was a small cog in large machine, responsible for marketing and client development and nothing beyond that. He refuted testimony from a government witness who alleged he withheld knowledge from investors of ongoing fraud at the company.

National Century was a financier for health-care providers, buying medical firms' receivables at a discount and packaging them as asset-backed bonds for sale to investors.

During his National Century tenure, Dierker was at one point in charge of client development, a job that included scouting medical providers struggling to make ends meet. One of those customers was California Psychiatric Medical Services, a health-care provider to the indigent in southern California that was reorganizing under Chapter 11 bankruptcy protection.

The government alleges Dierker allowed money from one of National Century's investor-backed funds to be used to finance California Psychiatric, which would have constituted securities fraud because those investor-backed funds were barred from helping companies involved in bankruptcy.

Former National Century employees have testified the company funded California Psychiatric out of NPF XII Inc., an investor-backed fund. Because Dierker was in charge of approving financing for California Psychiatric, the government has alleged he approved the funding from NPF XII.

During earlier testimony Thursday, a bankruptcy expert said Dierker's actions involving California Psychiatric were above board. Kathryn Williams, an attorney at a Cleveland bankruptcy law firm, testified that after going through all the documents and court orders related to California Psychiatric, she found Dierker had followed orders from the bankruptcy court and had only approved financing from another fund. Dierker is the last defense witness expected to testify in the trial, which began Feb. 4.

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