Pickens heaps praise on his allies and scorn on those who stood in his way, offering comeuppance to Rainwater and his wife Darla Moore, who engineered

By Chris Baltimore

HOUSTON (Reuters) - You've seen T. Boone Pickens on "Larry King Live," watched his commercials exalting the "Pickens Plan" to build windmills and listened to him warn of a looming energy crisis.

Now the Texas oil tycoon shares hints at how you can attain a modest measure of his success -- which includes a 68,000-acre ranch teeming with quail and deer and a Gulfstream 550 jet -- and head off an energy crisis while you're at it.

In his new book, "The First Billion Is the Hardest" (Crown Business, $26.95), the "Oracle of Oil" tells how he learned the basics of capitalism as a paperboy, founded an oil company, and eventually struck pay-dirt as an energy hedge fund manager.

It's a Horatio Alger story with deep roots in the American rags-to-riches theme, written with a late-career Baby Boomer in mind. His message to the aging careerist: It's never too late to recreate yourself and find resurgence.

"Wake up every morning believing you're going to live forever," the 80-year-old former corporate raider writes. "No limits. No restrictions." The "T" is for Thomas but his friends call him "Pick."

The straight-talking Texan offers up his career as testament to the regenerative powers of the U.S. capitalist system.

After building Mesa Petroleum into the largest independent U.S. oil company from a $2,500 investment, Pickens was nudged out of the chief executive's chair by powerful financiers like Richard Rainwater.

At age 69 Pickens found himself embroiled in a bitter divorce proceeding while trying to run a money-losing energy fund and suffering from undiagnosed depression. But Pickens gritted his teeth, focused on getting in shape, and eventually maneuvered his energy fund, BP Capital to take advantage of the biggest one-year run-up of natural gas prices in history. From 2000 to 2007 the fund made a total profit of $8 billion.

"Things will get better if you hang in there and believe in yourself," Pickens writes.

Pickens heaps praise on his allies and scorn on those who stood in his way, offering comeuppance to Rainwater and his wife Darla Moore, who engineered Pickens' exit from Mesa. Pickens Moore as a "wolverine" who came between Pickens and Rainwater.

There's a chapter devoted to management theory, interspersed with declaratives like "DON'T MANAGE, LEAD." Another chapter lays out Pickens' treatise on how to make America energy independent by building windmills and powering cars with electricity and natural gas, not gasoline.

And there's a long-winded chapter devoted to his college alma mater -- Oklahoma State University.

On one of the bigger energy topics of the day, he disputes the idea that Saudi Arabia -- the world's top oil exporter -- can boost output at the drop of a hat.

"The Saudis say they've got 260 billion barrels," Pickens writes. "I don't believe them."

(Reporting by Chris Baltimore; Editing by Eddie Evans)

"...mark the end of a nearly six-year march ..."

"These sentences mark the end of a nearly six-year march to justice for the architects of the financial house of cards known as National Century,"


THE END...REALLY?
THE CEO & Founder has yet to go on trial1
Now how can this be the end?
SMELL A RAT? Or how about an INSIDER IN THE DOJ that is there to PROTECT MR JAMES K HAPP....THE RAINWATER CONNECTION!
YES...RICHARD RAINWATER...the TEXAS BILLIONAIRE AND EX-PARTNER OF BUSH

Where the HELL ARE THE INVESTIGATIVE REPORTERS ?

THE END OF A SIX YEAR MARCH? PLEASE.....WAKE UP!



FOR IMMEDIATE RELEASE
Thursday, August 7, 2008
WWW.USDOJ.GOVCRM
(202) 514-2007
TDD (202) 514-1888


Former National Century Financial Enterprises Executives Sentenced for Roles in $3 Billion Securities Fraud Scheme
WASHINGTON – Four former National Century Financial Enterprises (NCFE) executives have been sentenced for their roles in a scheme to deceive investors about the financial health of NCFE, Acting Assistant Attorney General Matthew Friedrich and U.S. Attorney Gregory G. Lockhart of the Southern District of Ohio announced today. NCFE, formerly based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.

Donald H. Ayers, 72, of Fort Myers, Fla., an NCFE vice chairman, chief operating officer, director and owner of the company, was sentenced on Aug. 6, 2008, to 15 years in prison for conspiracy, securities fraud and money laundering.

Randolph H. Speer, 57, of Peachtree City, Ga., NCFE’s chief financial officer, was sentenced on Aug. 6, 2008, to 12 years in prison for conspiracy, securities fraud, wire fraud and money laundering.

Roger S. Faulkenberry, 47, of Dublin, a senior executive responsible for raising money from investors, was sentenced on Aug. 7, 2008, to ten years in prison for conspiracy, securities fraud, wire fraud and money laundering.

James E. Dierker, 40, of Powell, Ohio, associate director of marketing and vice president of client development, was sentenced on Aug. 7, 2008, to five years in prison for conspiracy and money laundering.


Rebecca S. Parrett, 59, of Carefree, Ariz., an NCFE vice chairman, secretary, treasurer, director and owner of the company, became a fugitive following the March 2008 jury verdict. She faces a maximum penalty of 75 years in prison and $2.5 million in fines.

U.S. District Court Judge Algenon Marbley also ordered the defendants to forfeit $1.7 billion of property representing the proceeds of the conspiracy and to pay restitution of $2.3 billion.

"In a scheme which lasted for years, these defendants purposely misled the investing public about National Century, its financial health, and the way in which it did business," said Acting Assistant Attorney General Matthew Friedrich. "When the facade collapsed and National Century filed for bankruptcy, investors were left holding the bag for billions of dollars in losses. The sentences handed down in this case justly reflect the gravity of the offenses."

"These sentences mark the end of a nearly six-year march to justice for the architects of the financial house of cards known as National Century," said Gregory G. Lockhart, U.S. Attorney for the Southern District of Ohio. "These crimes touched hundreds of thousands of Americans if they participated in a pension that invested in National Century, or had money in any of the financial institutions who bought securities from National Century."


"Unfortunately today’s sentencing does not immediately restore investor confidence or offer complete financial restitution for the victims of one of the largest corporate fraud investigations," said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division. "The FBI and our law enforcement and regulatory partners will do whatever it takes so that no company, in small town America or major metropolitan cities alike, misrepresents their financial health and defrauds investors."


"The IRS, along with our law enforcement partners, will vigorously pursue corporate officers who victimize their investors and violate the public trust," said Internal Revenue Service (IRS) Chief of the Criminal Investigation Division Eileen Mayer. "Today's sentence demonstrates the government's determination to restore and ensure that trust."


Evidence was presented at trial in February 2008 that the defendants engaged in a scheme to deceive investors and rating agencies about the financial health of NCFE and how investor monies would be used. Between May 1998 and May 2001, NCFE sold notes to investors with a combined value of $4.4 billion, which evidence showed were actually worth approximately six cents on the dollar at the time of NCFE’s bankruptcy in November 2002.

Court documents show that NCFE presented a business model to investors and rating agencies that called for NCFE to purchase high-quality accounts receivable from healthcare providers using money NCFE obtained through the sale of asset-backed notes to institutional investors. Evidence at trial showed that the defendants knew that the business model NCFE presented to the investing public differed drastically from the way NCFE did business within its own walls and that NCFE was making up the information contained in monthly investor reports to make it appear as though NCFE was in compliance with its own governing documents.

Ayers, Speer, Faulkenberry, Dierker and Parrett were five of eight individuals indicted in the case in July 2007. Lance K. Poulsen was severed from the other defendants following his arrest on obstruction of justice charges on Oct. 18, 2007. He will be sentenced on the obstruction of justice charges on Aug. 8, 2008. Poulsen’s trial on conspiracy, securities fraud, wire fraud, mail fraud and money laundering charges is scheduled to begin Oct. 1, 2008. James K. Happ, a certified public accountant and former executive vice president for servicer operations will face charges of conspiracy and wire fraud at trial scheduled to begin Dec. 1, 2008. Jon A. Beacham, who was responsible for raising money from investors through the sale of notes, pleaded guilty to conspiracy and securities fraud on July 13, 2007, and awaits sentencing.

The case was prosecuted by Assistant U.S. Attorney Douglas Squires of the Southern District of Ohio, Senior Litigation Counsel Kathleen McGovern and Trial Attorney Wes R. Porter of the Criminal Division's Fraud Section, with assistance from Fraud Section Paralegal Specialists Crystal Curry and Sarah Marberg. The investigation was conducted by FBI agents Matt Daly, Ingrid Schmidt and Tad Morris; IRS Inspectors Greg Ruwe and Mark Bailey; U.S. Postal Inspector Dave Mooney; and U.S. Immigration and Customs Enforcement agent Celeste Koszut.

###

08-700

"...company repaid investors ..."

Does any reporter ask "WHICH" INVESTORS were "REPAID"?



NATIONAL CENTURY CASE
Ex-CEO?s boating request opposed
Wednesday, July 05, 2006
Barnet D . Wolf
THE COLUMBUS DISPATCH



Federal prosecutors say money that should have belonged to investors in the defunct National Century Financial Enterprises was transferred to an account in the Bahamas.

The information was disclosed by the government in documents opposing a request by the company?s former CEO, Lance K. Poulsen, to be allowed to travel in a 20-foot fishing boat.

Poulsen was one of seven former National Century Financial Enterprises executives charged in May with engineering a $3 billion fraud at the Dublin based company.

All seven have pleaded not guilty. A trial date was set last week for Sept. 3, 2007.

No hearing date has been set on Poulsen?s request.

National Century provided financing for troubled hospitals, clinics and other health-care providers, buying their accounts receivables at a discount with money raised from investors.

The company repaid investors when it collected the receivables. However, National Century collapsed in late 2002 after investors became concerned about the company?s accounting practices.

Poulsen, who now lives in Port Charlotte, Fla., was released after he posed a $1 billion bond, agreed to give up his passport and was prevented from using his 60-foot, ocean-going yacht.

The former executive last week asked the court to change the terms of his release so that he could use the smaller boat to fish in coastal waters, but the government objected.

The response filed by Assistant U.S. Attorney Dale Williams said money that should have gone to National Century investors was sent offshore.

Funds "illicitly" taken from the company?s bond programs were transferred from and through financial institutions in the United States and Europe "before being transferred to an account of an undisclosed entity in Nassau, Bahamas," Williams wrote.

Neither Poulsen nor his attorney, Thomas Tyack, could be reached for comment.

The government opposed Poulsen?s request, saying that even though the smaller boat is not considered suitable for ocean travel, the craft is capable of making such a trip.

Williams also took note of Poulsen?s skill in operating marine navigational systems, and said that a properly equipped 20-foot inboard/outboard boat could go from Florida to the Bahamas, where a U.S. citizen doesn?t need a passport.


bwolf@dispatch.com?

Through a mistake in the system, Parrett was never fitted for a monitoring device ....

Funny, this article does not mention one word of the upcoming trial for the "MASTERMIND" CEO, FOUNDER, of this company ! Nor , does it mention the EXECUTIVE, that is supposedly expected to go to trial AFTER, yes AFTER, the FOUNDER!

James K Happ.Now this is the MAN!!!
No reporter mentions this guy......hmmm.......WONDER WHY?
Although, he & his wife were able to sell and purchase multi-million dollar property in Florida recently. Apparently, he was prepared for that but not the trial that calls for him to be last in the GROUP......hmmmm

Remeber, FIVE EXECUTIVES were already sentenced, one of which has already served and been released.



Friday, August 15, 2008 | Modified: Tuesday, August 19, 2008 - 8:00 AM
Parrett’s disappearance kept rumor mill alive amid NCFE sentencings
Business First of Columbus -
by Kevin Kemper


Still missing after more than four months on the lam, Rebecca Parrett’s legal appeals are being put on hold while speculation circulates over her whereabouts.

Parrett was one of five executives convicted this year in a multibillion-dollar fraud linked to the 2002 collapse of National Century Financial Enterprises Inc., the Dublin company she co-founded. Parrett, 58, was considered part of the leadership cabal at the company and was convicted on fraud, money laundering and securities fraud charges. She is facing up to 75 years in prison on those charges.

But shortly after returning to her home in Arizona to await sentencing, Parrett went missing. Since her late March disappearance, U.S. marshals have been chasing down “several dozen” tips from strangers and acquaintances, said Deputy U.S. Marshal Drew Shadwick, who is in charge of the investigation.

Through a mistake in the system, Parrett was never fitted for a monitoring device after she was allowed to go home.

News about Parrett has been scarce, and in the absence of facts, it appears fiction has begun to circulate.

During the sentencings of Parrett’s co-defendants this month in Columbus, legal observers talked about what they have heard through the grapevine. One suggested Parrett’s minivan was found. Another said authorities discovered a corpse that might have been Parrett.

Another theory suggested someone saw Parrett in Aruba and snapped her photo with a cell phone.

“We’ve had some stranger (identifications),” Shadwick said. “People send pictures thinking it’s her.”

Part of that may be due to the publicity surrounding Parrett’s disappearance. The television show America’s Most Wanted features Parrett on its Web site and it aired a segment about her in June.

The site claims her aliases include Rebecca Green, Rebecca Kunzi, Rebecca House, Rebecca Robinson, Rebecca Ayers and Rebecca Mayes.

Adding fuel to the rumor fire was the accusation that Parrett’s four co-conspirators were accused in April of plotting an escape to Aruba.

Three of the former executives, Donald Ayers, Randolph Speer and Roger Faulkenberry, were jailed until their sentencings as a precaution. Co-defendant James Dierker was allowed by U.S. District Court Judge Algenon Marbley to remain under house arrest after friends, family and coworkers sent letters attesting to his character.

In addition to the jail time she is facing on her convictions, Parrett could expect to face up to 15 additional years for disappearing, said Assistant U.S. Attorney Douglas Squires.

“Her flight would be considered in fashioning a sentence, as well as potential new charges for bail jumping,” said Squires, who prosecuted the National Century executives.

By comparison, a jury found Ayers, who is Parrett’s ex-husband, guilty on nearly identical charges as Parrett. He was sentenced to 15 years in prison.

The government didn’t sentence Parrett despite her absence because federal law allows convicts to seek leniency before sentencing, said Gregory Peterson, Parrett’s attorney.

Peterson said he’s had no contact from Parrett since shortly after the trial. After she disappeared, he stopped filing legal arguments on her behalf.

“Everything with respect to her has been stayed, like a time out,” he said.

Peterson told Marbley after Parrett’s conviction that she had no money left after paying her legal fees, but government agents think Parrett has access to wealth thanks to her time at National Century, where the fraud took nearly $2 billion from investors.

If that’s the case, Parrett has no reason to turn herself in, said Lois Colley, a private investigator who runs Colley Intelligence International in Columbus.

“She doesn’t have anything to give to the government unless she knows where some of the money is buried,” said the law enforcement veteran. “But the government is not usually interested in bargaining.”



614-220-5460 | kkemper@bizjournals.com

"...much about NCFE remains shrouded in secrecy"

Do you wonder why the"SECRECY" ?
Lets look at Friends of GW BUSH..& Mr McCAIN for that matter......

NCFE: Death-Dealing Side of the Bubble
by John Hoefle

Lyndon LaRouche has long maintained that it is not just the collapse of the world's largest financial bubble that is deadly. Attempting to maintain that bubble is measured in lives wasted, destroyed, and lost. The bankruptcy of, and mushrooming scandal around, National Century Financial Enterprises (NCFE), provides an insight into how this destructive process works, and illustrates the consequences of failing to re-regulate industry and infrastructure, to stop such abuses.

In the aftermath of the near-meltdown of the global financial system in September 1998, the world's major central banks, led by the Federal Reserve, printed and unleashed what speculator/drug-pusher George Soros blithely called a "wall of money," in a desperate attempt to stave off a total blowout. Part of these "walls of money" pumped into the banking systems was used to carve out wider channels for existing income streams to flow into the banks' pockets. Some of these measures were legal; others were allowed only because Congress had legalized them by systematically dismantling existing protections; and some were illegal even in a fraud-friendly environment. The post-1998 policy was, in effect, to beg, borrow, or steal anything that could be stolen, and throw it into the bubble.

It is this combination of monetary policy, deregulation and financial asset-grabbing which created the dot.com bubble, the related telecom bubble, and the Enron/energy pirates' Wall Street bubble; all of which have subsequently exploded and are now revealed to be what LaRouche had said they were—scams. Now, with the bankruptcy of NCFE, another aspect of this post-1998 looting comes out of the shadows and into the light.

The Asset-Backed Securities Danger
NCFE was basically a financial "factor," advancing cash to hospitals, physicians, and other health-care facilities in exchange for their receivables—the delayed payments made by insurance companies and government agencies for patients' treatment. NCFE would place these receivables into pools, then issue derivative securities—known as asset-backed securities—backed by the expected insurance payments.

When Federal Reserve Chairman Sir Alan Greenspan talks about how the derivatives market has saved the financial system by spreading the risk, one of the elements he has in mind, no doubt, is the asset-backed securities market, which has doubled in size since 1998. As of the second quarter of 2002, there were $1.4 trillion in asset-backed securities outstanding, according to the Bond Market Association. Of this amount, $394 billion—28% of the total—were securities backed by credit-card payments; $234 billion—17%—were backed by home equity payments; and $205 billion—14%—were backed by auto-loan payments.

Asset-backed securities account for only 7% of the $20 trillion U.S. bond market, falling well short of the $4.5 trillion in mortgage-related bonds, or the $4 trillion in corporate bonds, but they play an important role in what is politely called "risk management." Commercial banks have been quite active in recent years, converting their credit-card and other loans into asset-backed securities, which are then sold primarily to institutional investors. The effect is to take the loans off the banks' books, shifting the risk of non-payment of the loans from the banks, to the owners of the securities. In these days of soaring debts and a shrinking economy, such a method for shifting losses from banks to pension, mutual, and other publicly owned funds is no small consideration for a financier.

The Squeeze
NCFE was basically in the business of loaning hospitals, nursing homes, and other medical facilities money to get them through the period between when they provide a service and when they get reimbursed for that service by the relevant insurance company or government agency. The more slowly they received their payments, the weaker their financial condition; since the health maintenance organizations were notorious for delaying reimbursements, the HMOs created the opening for NCFE (and others, though NCFE was the largest player in the field) to step in and fill the gap. For a fee, of course. Caught in this squeeze, more than 100 clients signed up for NCFE's services, with the company buying $15 billion in receivables and issuing $6 billion in asset-backed securities since its founding in 1991.

As a private company not required to make public filings with the Securities and Exchange Commission, much about NCFE remains shrouded in secrecy. But one can tell a lot by looking at its board, which consisted of four of the company's founders and two executives of J.P. Morgan Chase, which controls 16% of the company through its Beacon Group III private equity fund. In addition, Morgan Chase and Bank One are trustees for NCFE's bond trusts. The bonds themselves were underwritten by Crédit Suisse First Boston, the investment banking arm of Switzerland's Crédit Suisse banking/insurance giant. The top purchasers of the bonds included PIMCO, the world's largest bond fund and a subsidiary of insurer Allianz, the world's third-largest financial institution; Alliance Capital Management, an arm of French insurance giant Axa; and ING, the Dutch insurance/banking conglomerate.

All in all, NCFE appears to fit the profile of a looting operation, whose existence served mainly to divert a portion of the health-care income stream into the pockets of some of the biggest financial institutions in the world. Now it has collapsed, leaving a bankruptcy wave which is now spreading among medical providers, with disastrous consequences for the health-care system and its patients.

Small hospitals, nursing homes and other health care providers .....Really?

I thought HCA was the largest Healthcare Provider in the country?



National Century Financial Enterprises Executives - GUILTY - in $3 Billion Securities Fraud Scheme!
March 16, 2008

It is true - every choice has a consequence! That statement holds true in every choice you make in life. Just like gravity, you can’t avoid the consequences of choices that you make. Now, don’t misread that statement - consequences don’t alway mean “bad” - they are just consequences. Your choices can create - Negative Consequences or Positive Results. By your choices you decide.

The Columbus Dispatch reported that after a day and a half of deliberation, the jury of eight women and four men came back with a determination of “guilty” for every one of the 40 charges against two of the Dublin company’s founders and three of its former executives.

In the case of Donald H. Ayers, age 71, of Fort Meyers, Florida - Rebecca S. Parrett, age 59, of Carefree, Arizona - Randolph H. Speer, age 58, of Peachtree City, Georgia - Roger S. Faulkenberry, age 46, of Dublin, Ohio - and James E. Dierker, age 40, or Powell, Ohio - the choices they made as officers of National Century Financial Enterprises have yielded what will be a certain unpleasant consequence - likely time in federal prison.

Based on charges of conspiracy, fraud and money laundering, the jury returned the guilty verdict on all charges contained in a 27-count superseding indictment stemming from a scheme to deceive investors about the financial health of NCFE. The company, which was based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.

“This case is one of the largest corporate fraud investigations involving a privately held company headquartered in small town America,” said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division. “The FBI continues to leverage its corporate fraud expertise gained through large-scale investigations such as Enron and WorldCom, to ensure that corporations represent their true health. From Dublin, Ohio, to Houston, Texas to New York, New York, the message is clear that the FBI will not stand by as corporate executives manipulate their financial statements and conceal illegal activities from criminal and regulatory authorities.”

According the the news release from the US Attorney’s office:

The government presented evidence that the defendants engaged in a scheme to deceive investors and rating agencies about the financial health of NCFE and how investor monies would be used. Between May 1998 and May 2001, NCFE sold notes to investors with an aggregate value of $4.4 billion, which evidence presented at trial showed were worth approximately six cents on the dollar at the time of NCFE’s bankruptcy in November 2002.

NCFE presented a business model to investors and rating agencies that called for NCFE to purchase high-quality accounts receivable from healthcare providers using money NCFE obtained through the sale of asset-backed notes to institutional investors. The evidence at trial showed that NCFE advanced money to health care providers without receipt of the requisite accounts receivable, oftentimes to healthcare providers that were owned in whole or in part by the defendants. The evidence further showed that the defendants lied to investors and rating agencies in order to cover up this fraud.

Small hospitals, nursing homes and other health care providers sold their accounts receivable to the company, usually getting 80 or 90 cents on the dollar, rather than waiting for insurance payments. National Century then collected the full amount of the payments.

The evidence at trial showed that NCFE concealed from investors the shortfalls produced by this fraud by moving money back and forth between accounts, fabricating data in investor reports, incorporating false information into the accounting system, and making other false statements to investors and rating agencies. Moreover, the defendants’ compensation was tied to the amount of money they advanced to healthcare providers and those providers’ outstanding balance owed to NCFE. The government presented evidence at trial that showed that the defendants knew that the business model NCFE presented to the investing public differed drastically from the way NCFE did business within its own walls and that NCFE was making up the information contained in monthly investor reports to make it appear as though NCFE was in compliance with its own governing documents.

“These convictions send a clear message to corporate America that executives will be brought to justice for lying to investors and misrepresenting the actions taken in their normal course of business,” said Deputy Attorney General Mark Filip, chairman of the President’s Corporate Fraud Task Force. “These are the latest successes in our efforts to improve the integrity of our financial markets.”

“By holding accountable those who break the law, today’s convictions help restore some of the faith and trust the public loses every time corporate executives defraud their investors. The jury’s verdict demonstrates that the public will not stand by while company executives commit billion dollar frauds, leaving the honest investors to bear the losses they create,” said Assistant Attorney General Alice S. Fisher.

Facing millions of dollars in fines and up to 140 years in prison, the corporate officers found guilty here will have time to reflect on the choices they made and the consequences that follow.

White Collar Crime and Business Ethics Speaker - Today, I speak to groups nationwide about Choices and Consequences. Do your employees make the best choices for your company—or for themselves? Are you ready for some straight talk about success, choices, and ethics from a business executive who lost it all…and gained more than he could ever imagine?

In an unusually vulnerable style, I explore the decisions we make through the veil of honesty, integrity, and ethics. Your audience will be touched by this personal story and poignant lessons. Having been where the guilty executives above are going, I know first hand the pain caused by poor choices and practical ways to avoid making poor choices.

For information about my presentations, visit my website - www.chuckgallagher.com

Your comments on this blog are

JPMorgan Chase,NPF XII,Bank One, N.A,

The following is an excerpt from a 10-K SEC Filing, filed by J P MORGAN CHASE & CO on 3/9/2006.




Enron litigation. JPMorgan Chase and certain of its officers and directors are
involved in a number of lawsuits arising out of its banking relationships with
Enron Corp.




The three current or former Firm employees are sued in their roles as former
members of NCFE's board of directors (the "Defendant Employees"). JPMorgan
Chase, JPMorgan Partners and Beacon Group, LLC, are claimed to be vicariously
liable for the alleged actions of the Defendant Employees. Banc One Capital
Markets, Inc. is sued in its role as co-manager for three note offerings made by
NPF XII. Other defendants include the founders and key executives of NCFE, its
auditors and outside counsel, and rating agencies and placement agents that were
involved with the issuance of the Notes. Plaintiffs in these actions include
institutional investors who purchased more than $2.7 billion in original face
amount of asset-backed securities issued by NCFE

National Century Financial Enterprises litigation. JPMorgan Chase, JPMorgan
Chase Bank, JPMorgan Partners, Beacon Group, LLC and three current or former
Firm employees have been named as defendants in more than a dozen actions filed
in or transferred to the United States District Court for the Southern District
of Ohio (the "MDL Litigation"). In the majority of these actions, Bank One, Bank
One, N.A., and Banc One Capital Markets, Inc. are also named as defendants.
JPMorgan Chase Bank and Bank One, N.A. are also defendants in an action brought
by The Unencumbered Assets Trust ("UAT"), a trust created for the benefit of the
creditors of National Century Financial Enterprises, Inc. ("NCFE") as a result
of NCFE's Plan of Liquidation in bankruptcy. These actions arose out of the
November 2002 bankruptcy of NCFE. Prior to bankruptcy, NCFE provided financing
to various healthcare providers through wholly-owned special-purpose vehicles,
including NPF VI and NPF XII, which purchased discounted accounts receivable to be paid under third-party insurance programs. NPF VI and NPF XII financed thepurchases of such receivables, primarily through private placements of notes ("Notes") to institutional investors and pledged the receivables for, among
other things, the repayment of the Notes. In the MDL Litigation, JPMorgan Chase
Bank is sued in its role as indenture trustee for NPF VI, which issued
approximately $1 billion in Notes. Bank One, N.A. is sued in its role as indenture trustee for NPF XII, which issued approximately $2 billion in Notes.
The three current or former Firm employees are sued in their roles as former
members of NCFE's board of directors (the "Defendant Employees"). JPMorgan
Chase, JPMorgan Partners and Beacon Group, LLC, are claimed to be vicariously
liable for the alleged actions of the Defendant Employees. Banc One Capital
Markets, Inc. is sued in its role as co-manager for three note offerings made by
. Other defendants include the founders and key executives of NCFE, its
auditors and outside counsel, and rating agencies and placement agents that were
involved with the issuance of the Notes. Plaintiffs in these actions include
institutional investors who purchased more than $2.7 billion in original face
amount of asset-backed securities issued by NCFE

Item 2: Properties


The headquarters of JPMorgan Chase is located in New York City at 270 Park
Avenue, which is a 50-story bank and office building owned by JPMorgan Chase.
This location contains approximately 1.3 million square feet of space. In total,
JPMorgan Chase owns or leases approximately 12.3 million square feet of
commercial office space and retail space in New York City.

JPMorgan Chase and its subsidiaries also own or lease significant administrative
and operational facilities in Chicago, Illinois (5.1 million square feet),
Houston and Dallas, Texas (6.8 million square feet), Columbus, Ohio (2.9 million
square feet), Newark and Wilmington, Delaware (2.2 million square feet),
Phoenix, Arizona (1.4 million square feet), Tampa, Florida (1.0 million square
feet), Jersey City, New Jersey (1.2 million square feet), and Indianapolis,
Indiana (900 thousand square feet).

Outside the United States, JPMorgan Chase owns or leases facilities in the
United Kingdom (2.7 million square feet) and in other countries (2.6 million
square feet).

In addition, JPMorgan Chase and its subsidiaries occupy offices and other
administrative and operational facilities throughout the world under various
types of ownership and leasehold agreements, including 2,641 retail branches in
the United States. The properties occupied by JPMorgan Chase are used across all
of the Firm's business segments and for corporate purposes.
JPMorgan Chase continues to evaluate its current and projected space
requirements. There is no assurance that the Firm will be able to dispose of its
excess premises or that it will not incur charges in connection with such
dispositions. Such disposition costs may be material to the Firm's results of
operations in a given period. For a discussion of occupancy expense, see the
Consolidated results of operations discussion on pages 29-30.
Item 3: Legal proceedings

Enron litigation. JPMorgan Chase and certain of its officers and directors areinvolved in a number of lawsuits arising out of its banking relationships with
Enron Corp. and its subsidiaries ("Enron"). Several actions and other
proceedings, against the Firm, have been resolved, including adversary
proceedings brought by Enron's bankruptcy estate. In addition, as previously
reported, the Firm has reached an agreement to settle the lead class action
litigation brought on behalf of the purchasers of Enron securities, captioned
Newby v. Enron Corp., for $2.2 billion (pretax). The settlement is subject to
approval by the United States District Court for the Southern District of Texas.
The Newby settlement does not resolve Enron-related actions filed separately by
plaintiffs who opt out of the class action, or by certain plaintiffs who are
asserting claims not covered by that action.

The remaining Enron-related actions include individual actions against the Firm
by plaintiffs who were lenders or claim to be successors-in-interest to lenders
who participated in Enron credit facilities syndicated by the Firm; individual
and putative class actions by Enron investors, creditors and counterparties; and
third-party actions brought by defendants in Enron-related cases, alleging
federal and state law claims against JPMorgan Chase and many other defendants.
Fact discovery in these actions is mostly complete. Plaintiffs in two of the
bank lender cases have moved for partial summary judgment, which the Firm will
oppose.

In a purported, consolidated class action lawsuit by JPMorgan Chase stockholders
alleging that the Firm issued false and misleading press releases and other
public documents relating to Enron in violation of Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder, the United States
District Court for the Southern District of New York dismissed the lawsuit in
its entirety without prejudice in March 2005. Plaintiffs filed an amended
complaint in May 2005. The Firm has moved to dismiss the amended complaint, and
the motion has been submitted to the court for decision.
In a putative class action on behalf of JPMorgan Chase employees who
participated in the Firm's 401(k) plan are alleging claims under the Employee
Retirement Income Security Act ("ERISA") for alleged breaches of fiduciary
duties and negligence by JPMorgan Chase, its directors and named officers. In
August 2005, the United States District Court for the Southern District of New
York denied plaintiffs' motion for class certification and ordered some of
plaintiffs' claims dismissed. A petition has been filed by the plaintiffs
seeking review of the denial of class certification in the United States Court
of Appeals for the Second Circuit, which petition remains pending. The Firm has
also moved for summary judgment seeking dismissal of this ERISA lawsuit in its
entirety.

IPO allocation litigation. Beginning in May 2001, JPMorgan Chase and certain of
its securities subsidiaries were named, along with numerous other firms in the
securities industry, as defendants in a large number of putative class action
lawsuits filed in the United States District Court for the Southern District of
New York. These suits allege improprieties in the allocation of stock in various
public offerings, including some offerings for which a JPMorgan Chase entity
served as an underwriter. The suits allege violations of securities and
antitrust laws arising from alleged material misstatements and omissions in
registration statements and prospectuses for the initial public offerings
("IPOs") and alleged market manipulation with respect to aftermarket
transactions in the offered securities. The securities lawsuits allege, among
other things, misrepresentation and market manipulation of the aftermarket
trading for these offerings by tying allocations of shares in IPOs to
undisclosed excessive commissions paid to JPMorgan Chase and to required
aftermarket purchase transactions by customers who received allocations of
shares in the respective IPOs, as well as allegations of misleading analyst
reports. The antitrust lawsuits allege an illegal conspiracy to require
customers, in exchange for IPO allocations, to pay undisclosed and excessive
commissions and to make aftermarket purchases of the IPO securities at a price
higher than the offering price as a precondition to receiving allocations. The
securities cases were all assigned to one judge for coordinated pre-trial
proceedings, and the antitrust cases were all assigned to another judge. On
February 13, 2003, the Court denied the motions of JPMorgan Chase and others to
dismiss the securities complaints. On October 13, 2004, the Court granted in
part plaintiffs' motion to certify classes in six "focus" cases in the
securities litigation. On June 30, 2005, the United States Court of Appeals for
the Second Circuit granted the underwriter defendants' petition for permission
to appeal the district court's class certification decision, and the appeal
currently is being briefed. The Second Circuit likely will hear oral argument
sometime during the first half of 2006.

In addition, on February 15, 2005, the Court in the securities cases
preliminarily approved a proposed settlement of plaintiffs' claims against 298
of the issuer defendants in these cases and a fairness hearing on the proposed
settlement is now scheduled for April 24, 2006. Pursuant to the proposed issuer
settlement, the insurers for the settling issuer defendants, among other things,

(1) agreed to guarantee that the plaintiff classes will recover at least
$1 billion from the underwriter defendants in the IPO securities and antitrust



7



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Part I




cases and to pay any shortfall, and (2) conditionally assigned to the plaintiffs
any claims related to any "excess compensation" allegedly paid to the
underwriters by their customers for allocations of stock in the offerings at
issue in the IPO litigation. Joseph P. Lasala, the trustee designated by
plaintiffs to act as assignee of such issuer excess compensation claims, filed
complaints purporting to allege state law claims on behalf of certain issuers
against JPMSI and other underwriters (the "LaSala Actions"), together with
motions to stay proceedings in each case. To date, JPMSI is a defendant in more
than half of the approximately 100 pending LaSala Actions. On August 30, 2005,
the Court stayed until resolution of the proposed issuer settlement the
LaSalaActions then pending against JPMSI and other underwriter defendants at
that time, as well as all future-filed LaSala Actions pursuant to the parties'
stipulation that the Court's decision would govern stay motions in all future
LaSala Actions. On October 12, 2005, the Court granted the underwriter
defendants' motion to dismiss one LaSala Action, which by stipulation applied to
the parallel motions to dismiss in all other pending and future-filed LaSala
Actions. The Court did, however, grant Plaintiffs leave to replead and noted
that the stay of the LaSala Actions remains in effect. Plaintiffs thereafter
filed amended complaints in the lead and other LaSala Actions in which
Plaintiffs are purportedly seeking equitable restitution on a breach of
fiduciary duty claim - a claim that sought damages in the initial LaSala
complaints and was dismissed on the ground that it was time-barred. On
November 21, 2005, the underwriter defendants moved to dismiss the amended
complaint in the lead LaSala Action and - by virtue of the stipulation of the
parties - thereby moved to dismiss the amended complaints in all other pending
and future-filed LaSalaActions. The motion currently is being briefed.
With respect to the IPO antitrust lawsuits, on November 3, 2003, the Court
granted defendants' motion to dismiss the claims relating to the IPO allocation
practices in the IPO Allocation Antitrust Litigation. On September 28, 2005, the
United States Court of Appeals for the Second Circuit reversed, vacated and
remanded the district court's November 3, 2003, dismissal decision. Defendants'
motion for rehearing en banc in the Second Circuit was denied on January 11,
2006.

A wholly separate antitrust class action lawsuit on behalf of a class of IPO
issuers alleging that JPMSI and other underwriters conspired to fix their
underwriting fees in IPOs is in discovery.

National Century Financial Enterprises litigation. JPMorgan Chase, JPMorgan
Chase Bank, JPMorgan Partners, Beacon Group, LLC and three current or former
Firm employees have been named as defendants in more than a dozen actions filed
in or transferred to the United States District Court for the Southern District
of Ohio (the "MDL Litigation"). In the majority of these actions, Bank One, Bank
One, N.A., and Banc One Capital Markets, Inc. are also named as defendants.
JPMorgan Chase Bank and Bank One, N.A. are also defendants in an action brought
by The Unencumbered Assets Trust ("UAT"), a trust created for the benefit of the
creditors of National Century Financial Enterprises, Inc. ("NCFE") as a result
of NCFE's Plan of Liquidation in bankruptcy. These actions arose out of the
November 2002 bankruptcy of NCFE. Prior to bankruptcy, NCFE provided financing
to various healthcare providers through wholly-owned special-purpose vehicles,
including NPF VI and NPF XII, which purchased discounted accounts receivable to
be paid under third-party insurance programs. NPF VI and NPF XII financed the
purchases of such receivables, primarily through private placements of notes
("Notes") to institutional investors and pledged the receivables for, among
other things, the repayment of the Notes. In the MDL Litigation, JPMorgan Chase
Bank is sued in its role as indenture trustee for NPF VI, which issued
approximately $1 billion in Notes. Bank One, N.A. is sued in its role as
indenture trustee for NPF XII, which issued approximately $2 billion in Notes.
The three current or former Firm employees are sued in their roles as former
members of NCFE's board of directors (the "Defendant Employees"). JPMorgan
Chase, JPMorgan Partners and Beacon Group, LLC, are claimed to be vicariously
liable for the alleged actions of the Defendant Employees. Banc One Capital
Markets, Inc. is sued in its role as co-manager for three note offerings made by
NPF XII. Other defendants include the founders and key executives of NCFE, its
auditors and outside counsel, and rating agencies and placement agents that were
involved with the issuance of the Notes. Plaintiffs in these actions include
institutional investors who purchased more than $2.7 billion in original face
amount of asset-backed securities issued by NCFE. Plaintiffs allege that the
trustees violated fiduciary and contractual duties, improperly permitted NCFE
and its affiliates to violate the applicable indentures and violated securities
laws by (among other things) failing to disclose the true nature of the NCFE
arrangements. Plaintiffs further allege that the Defendant Employees controlled
the Board and audit committees of the NCFE entities; were fully aware or
negligent in not knowing of NCFE's alleged manipulation of its books; and are
liable for failing to disclose their purported knowledge of the alleged fraud to
the plaintiffs. Plaintiffs also allege that Banc One Capital Markets, Inc. is
liable for cooperating in the sale of securities based upon false and misleading
statements. Motions to dismiss on behalf of the JPMorgan Chase entities, the
Bank One entities and the Defendant Employees are currently pending. In the UAT
action, JPMorgan Chase Bank and Bank One are sued in their roles as indenture
trustees. Claims are asserted under the Federal Racketeer Influenced and Corrupt
Organizations Act ("RICO"), the Ohio Corrupt Practices Act and various
common-law claims. On March 31, 2005, motions to dismiss the UAT action were
filed on behalf of JPMorgan Chase Bank. These motions are currently pending. On
February 22, 2006, the JPMorgan Chase entities, the Bank One entities and the
Defendant Employees reached a settlement with the holders of $1.6 billion face
value of Notes (the "Arizona Noteholders"), and reached a separate agreement
with the UAT. The settlements are contingent upon the entry of certain orders by
the MDL court and bankruptcy courts. Assuming the contingencies are met, the
Firm has agreed to pay the Arizona Noteholders the sum of $375 million for all
claims and potential claims held by them and has agreed to pay the UAT the sum
of $50 million for all claims or potential claims held by it.

In addition, the Securities and Exchange Commission has served subpoenas on
JPMorgan Chase Bank and Bank One, N.A. ("Bank One") and has interviewed certain
current and former employees. On April 25, 2005, the staff of the Midwest
Regional Office of the SEC wrote to advise Bank One that it is considering
recommending that the Commission bring a civil injunctive action against Bank
One and a former employee alleging violations of the securities laws in
connection with Bank One's role as indenture trustee for the NPF XII note
program. On July 8, 2005, the staff of the Midwest Regional Office of the
Securities and Exchange Commission wrote to advise that it is considering
recommending that the Commission bring a civil injunctive action against two
individuals, one present and one former employee of the Firm's affiliates,
alleging violations of certain securities laws in connection with their role as
former members of NCFE's board of directors. On July 13, 2005, the staff further
advised that it is considering recommending that the Commission also bring a
civil injunctive action against the Firm in connection with the alleged
activities of the two individuals as alleged agents of the Firm. Lastly, the
United States Department of Justice is also investigating the events surrounding
the collapse of NCFE, and the Firm is cooperating with that investigation.



8



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In addition to the various cases, proceedings and investigations discussed
above, JPMorgan Chase and its subsidiaries are named as defendants in a number
of other legal actions and governmental proceedings arising in connection with
their businesses. Additional actions, investigations or proceedings may be
brought from time to time in the future. In view of the inherent difficulty of
predicting the outcome of legal matters, particularly where the claimants seek
very large or indeterminate damages, or where the cases present novel legal
theories, involve a large number of parties or are in early stages of discovery,
the Firm cannot state with confidence what the eventual outcome of these pending
matters will be, what the timing of the ultimate resolution of these matters
will be or what the eventual loss, fines or penalties related to each pending
matter may be. JPMorgan Chase believes, based upon its current
knowledge, after consultation with counsel and after taking into account its
current litigation reserves, that the outcome of the legal actions, proceedings
and investigations currently pending against it should not have a material,
adverse effect on the consolidated financial condition of the Firm. However, in
light of the uncertainties involved in such proceedings, actions and
investigations, there is no assurance that the ultimate resolution of these
matters will not significantly exceed the reserves currently accrued by the
Firm; as a result, the outcome of a particular matter may be material to
JPMorgan Chase's operating results for a particular period, depending upon,
among other factors, the size of the loss or liability imposed and the level of
JPMorgan Chase's income for that period.

JPMORGAN CHASE & Co. & Bank One

NCFE said it was the victim of changing financial conditions and a delayed annual audit.

Ok......If this is the case, how was James Happ , the Executive from HCA/Columbia Home Care Group, who DIVESTED the HOMECARE DIVISON, to NCFE, able to convince NCFE to DUMP the losing Division of HCA/Columbia via NCFE?

JAMKES K HAPP, the EXECUTIVE who faces TRIAL in DECEMBER 2008, after EVERYONE from NCFE including the CO-FOUNDERS!!!


"...apparently without the knowledge of bond trustees J.P. Morgan Chase and Banc One Corporate Trust Services"

Apparently?......think again1

JPMORGAN CHASE & Co. (Pay attention to "& Co.")

Who in this tangled web designed the "DIP" debtor in Possession motto used across BANKRUPTCY COURTS in this country? On the cover of Fortune magazine, the one and only, Darla Moore, the wife of OIL MAN & HEALTCHARE HCA MAN, Richard Rainwater!



National Century under scrutiny; reserves reported depleted
(Story published on Friday, November 8, 2002)
Thursday, January 31, 2008 12:30 PM
By Phil Porter and Jeffrey Sheban

THE COLUMBUS DISPATCH
A Dublin-based company that lends money to the health-care industry is meeting with financial backers to sort out its finances.

Officials from National Century Financial Enterprises, which has 230 employees at its Memorial Drive headquarters, met yesterday with holders of the bonds it issues to pay for its business, spokesman Jim Nickell said.

The talks were aimed at finding out why reserve funds of bond-sale proceeds were largely depleted by NCFE, apparently without the knowledge of bond trustees J.P. Morgan Chase and Banc One Corporate Trust Services, or ratings agencies Moody's and Fitch.

Bondholders seeking answers include Pimco funds, Fremont Mutual Funds and UBS PaineWebber.

"There's no question we are working very hard to stabilize the company," Nickell said. "It's too soon to determine the outcome."

NCFE is the nation's largest purchaser of hospital, physician and other health-care receivables. It serves as a middleman between insurance companies and health-care providers around the country, including 60 hospitals, nursing homes and others.

To avoid waiting months to be paid, those health-care providers sell receivables for 97 cents on the dollar to NCFE. NCFE then collects payment from the patients' insurance carriers, Medicare or Medicaid.

Hospitals and health-care providers have been stepping forward to complain about NCFE.

Pain Control Consultants, a Grandview Heights-based pain center with 27 employees, says it hasn't been paid by the company for the past two weeks and is owed $700,000. NCFE pays out $30 million per week to its provider clients.

"When someone is getting deposits of your money and you are not getting it back, someone is stealing from you," said Dr. David Leak, medical director of Pain Control Consultants.

Leak said his company noticed accounting irregularities involving the Dublin company the past two years, adding Pain Control Consultants had received less money than owed for the past five or six months.

"I have asked five CPAs to look at their books, and they all walked away shaking their heads," Leak said.

Pain Control Consultants said it is owed for the months of September and October, when it deposited $860,000 but only received 22 percent compensation, compared with the 97 percent promised.

Leak said Pain Control Consultants has tried for months to buy out its contract with NCFE, without success.

Other providers also are complaining.

Michael Reese Hospital and Medical Center in Chicago has acknowledged that slow payments from NCFE have threatened its ability to meet payroll obligations.

NCFE's financing played an important role in 1998, when Doctors Community Healthcare of Arizona purchasing Michael Reese Hospital. Nearly $70 million in financing came from NCFE. The Arizona company also owns hospitals in Washington and Los Angeles that are NCFE clients.

Forbes has reported that NCFE has been the target of several lawsuits and allegations of fraud, including a federal suit in Baltimore that alleges NCFE was not advancing a nursing home enough money for it to maintain operations.

NCFE said it was the victim of changing financial conditions and a delayed annual audit.
The company has not been able to issue bonds since May and instead has dipped into the reserves of its biggest bond issue, called NPF XII. These reserves, not meant to be drawn on, were greatly depleted, causing credit-rating agencies to lower the company's rating.

Nickell said the audit for 2001 is being prepared by Deloitte & Touche and should be available soon.

Nickell attributed problems with Pain Control Consultants to a change in that company's status when it went under Medicare review.

"The dispute is disappointing because Dr. Leak was a long and valued customer," he said.

NCFE employs 327 at offices in Dublin; Durham, N.C.; Port Charlotte, Fla.; and Scottsdale, Ariz. The majority are in Muirfield Village, where the company had received approval last summer to improve and connect its four buildings.

The company was founded by Lance K. Poulsen, who remains chairman and chief executive; Donald H. Ayers and Rebecca S. Parrett. Ayers and Parrett, who came from OhioHealth, are retired but remain on the private company's board, Nickell said.

He said company officials weren't available for comment.

Two hundred local Arizona governmental entities and many governments in other states invested in NCFE,

April 11, 2007
Breaking News
Treasurer's payment to Attorney General investigated
By Phil Riske and Christian Palmer, Arizona Capitol Times

The Maricopa County Sheriff’s Office is investigating whether a $1.9 million payment from the Treasurer’s Office to the Attorney General’s Office for legal expenses was made as part of a deal to secure leniency for former treasurer David Petersen.

The June payment was for work Attorney General Terry Goddard’s office had done in obtaining a settlement in 2002 in a fraud case that cost local governments and the state $131 million in bad investments. Several sources confirm with the Arizona Capitol Times that current and former Treasurer’s Office employees have been questioned recently regarding the circumstances surrounding the payment.

In October, Petersen pleaded guilty to a single misdemeanor charge for failing to disclose a $4,200 commission he received for selling teaching materials for a character education program.

Petersen, who was facing felony charges of theft, fraud and conflict of interest, resigned Nov. 30 as part of a deal reached with Goddard. At sentencing hearing in December he was also ordered to pay $4,500 in fines and put on supervised probation for three years.

Maricopa County Sheriff Joe Arpaio would neither confirm nor deny that an investigation is being conducted, but said his office, in tandem with the Maricopa County Attorney’s Office, is “very active” in efforts against corruption by public officials.

“We have got a lot of investigations,” he said, noting recent newspaper reports of an official inquiry into possible corruption surrounding the light-rail construction project.

Barnett Lotstein, a spokesman for Maricopa County Attorney Andrew Thomas, said he could not confirm or deny an investigation of the payment.

Through his press aide, Andrea Esquer, Goddard said this morning, “The Attorney General's Office will cooperate fully with the Maricopa County Sheriff's office in this matter. The information related to this transaction [the payment] is a matter of public record.”

She added that Goddard was not aware of the investigation until contacted by Arizona Capitol Times.

Don Dybus, who was employed as a part-time special assistant at the treasury for what he described as an assignment to prepare the office for the next treasurer, negotiated the payment because Petersen recused himself from the matter.

Before Dybus’ employment, then-Chief Deputy Treasurer Blaine Vance refused to send the money without written advice from the state solicitor general.

Petersen, however, later approved the payment, which was for the Attorney General’s work is obtaining a settlement in the National Century Financial Enterprises (NCFE) fraud case.

Petersen’s sentence was viewed skeptically by some, including then-treasurer candidate Dean Martin, who regarded it as a “slap on the wrist.”

But Goddard at the time defended the plea arrangement, saying the most important thing was to get Petersen to leave office. And after the payment was made, the Solicitor General’s Office, an independent arm of the Attorney General’s Office, issued an opinion that the Treasurer’s Office indeed owed the money.

The Arizona Republic at the time also questioned the independence of the Solicitor General in an editorial.

“The solicitor general is appointed by Attorney General Terry Goddard. The decision to proceed with the payment should have been ratified by an outside, truly independent legal counsel. It wasn’t,” the editorial stated. “The intense push by Petersen and his part-time enforcer, Dybus, to overrule Vance and get the check to the attorney general smells of an effort to curry favor with Goddard, whose investigation of Petersen continues even now.”

Dybus has not responded to phone calls, but he told the Arizona Capitol Times in July that Petersen’s legal problems were never discussed when the payment negotiations were taking place.

Two hundred local Arizona governmental entities and many governments in other states invested in NCFE, which made loans to inner-city Medicare hospitals, before collapsing in 2002 in a fraud scandal involving $3 billion in losses to all investors, including the $131 million in Arizona.

Of that amount the state treasury lost $14.3 million. So far, $52 million has been recovered for Arizona.
The payment, made in June of 2006, was not disclosed to the Board of Investment, which oversees the state’s investment portfolio. The move angered board members, including Department of Administration Director Bill Bell, who asked why the state is required to pay 35 percent of its recovery in the NFCE case to the Attorney General’s Office.

He also questioned whether the board should have been informed since the recovered funds were tied to investments made by the Treasurer’s Office. Martin, the current state treasurer would not confirm or deny the investigation, but did acknowledge his office is providing materials requested by an attorney for Vance and Tony Malaj, Petersen’s former chief of staff

Malaj and Vance, who assisted the Attorney General in the Petersen investigation, have filed multi-million dollar claims against the state in a whistleblower case on grounds their cooperation would hurt their chances of future employment.

The Department of Administration, which handles such suits, did not respond to the claims within 60 days as mandated by state law. That means the two former employees are free to file civil lawsuits.

Arizona Capitol Times has requested documents under the open records law from DOA related to the claims.

The prospect of a county sheriff investigating an elected state official poses no problems regarding legal jurisdiction, Arpaio said.

“The sheriff is the chief law enforcement officer of this county,” he said. “I can investigate and lock up anybody, including the governor. Nobody is immune from the sheriff.”

-----------------

Contact Phil Riske at phil.riske@azcapitoltimes.com

Contact Christian Palmer at christian.palmer@azcapitoltimes.com

The performance of both trustees for NCFE, J.P. Morgan Chase and Bank One Corp., has come under fire;

NOT ENOUGH!
This story has REALLY yet to be told!!!


Article Excerpt
The fall of National Century Financial Enterprises, which thoroughly rattled the asset-backed securities market in December, continues to reverberate. Moody's Investors Service has gone on the warpath over the role of ABS trustees in that scandal, and is threatening to downgrade hundreds of ABS...
existing and mortgage-backed bonds-a threat that has rankled some market players, who point a finger right back at the ratings agencies.

Sources attending the "ABS West" securitization industry conference in Phoenix, Arizona last week said that some attendees publicly berated Moody's analysts for, as one source reported, "terrorizing the market" with its new comments about trustees. (The performance of both trustees for NCFE, J.P. Morgan Chase and Bank One Corp., has come under fire; Moody's last week said it may downgrade some ABS in which trustees see their role as ceremonial rather than protective of investors.)...

DCHC and its partner company, NCFE, are headquartered in John McCain’s Arizona.

My take on this blog is that you don't know the HALF OF IT!!
See my blog :

http://biggerthanenron.blogspot.com


Tuesday, March 11, 2008
NCFE A PARTNER WITH DCHC (AN ARIZONA COMPANY) ?

The stage was being set for the November 2, 2002 NCFE bankruptcy and the subsequent massive losses of Medicaid funds by the state of Arizona long before the actual event. In the realm of my research, limited because of the secrecy surrounding it, I am seeing “John McCain,” more and more. Certainly, the repetition of his name in this documentation gives a probable answer to the question, “Why was Arizona the ONLY state entity to invest money in a company, called by the National Securities Commission, ‘the lender of last resort?’” And the question, “Why did NCFE maintain a headquarters in Phoenix, Arizona?’ (To be close to the source of the money, I guess…AHCCCS must have been just down the street…)

I diligently copy here a report by Lynne Speed:

Schiller Institute
Massive Corruption Scandal Erupts
Around DC General

“The Boys from Brazile”
March 18, 2002

Schiller Institute and La Rouche Proven Right Again

The announcement March 7 of avowed McCain Democrat Donna Brazile’s new post as enforcer for the Democratic Party, has put the spotlight on the question: “What really happened at the mid-2001 Arizona meetings among Senator John McCain (R.-Ariz.) and Democratic Senators Daschle and Leiberman?” What effect will the political alliance of Eleanor Holmes Norton’s Donna with McCain, have to do with Daschele’s abrupt withdrawal of his previous written pledge to defend D.C. General Hospital?

The present escalation of that scandal-ridden case has centered on the curious alliance of Donna with John, and has erupted in the same time-frame as the February 28 announcement of the resignation of Washington, D.C. Health Department Director Dr. Ivan Walks, a key flunky of the financial oligarchy’s corrupt operation to shut down the only full-service public hospital in the nation’s capitol.

Donna, the former chief of staff for Washington’s Congressional Delegate Eleanor Holmes Norton, is also former chief of staff of the 2000 Al Gore Election Committee, a sometime Gore-McCain go-between; and, is currently campaign finance reform lobbyist for Senator McCain. Donna, with her connections to McCain, had been a key port of the operation of her crony, Delegate Eleanor Holmes Norton, in the scheme to shut down the hospital.

Lyndon LaRouche, whose forces led the fight to save D.C. General Hospital last year, as part of a broader international effort to defend health care and the principle of the General Welfare, issued a statement on Feb. 25, 2002, three days before Walks walked: “Donna Brazile’s relationship to Senator John McCain,” said La Rouche, “is the keystone of an arch of corruption embracing all of the interests, including D.C. Mayor Tony Williams and Eleanor Holmes Norton, who colluded in a patently corrupt operation to shut down and loot the remain of the only public general hospital of the nation’s capitol. Whether the Arizona money involved in that swindle was directly associated with McCain or not, McCain’s association with Brazile, Norton and Williams is a feature of the scandal which could potentially, bring down not only McCain, but McCain’s crony Lieberman.

The scandal continues to mount, as an international fight has erupted around the stated
Agreement among Senators Daschle, Lott, and President Bush, to introduce “fair trade” policies into the marketing of steel, and possibly other categories of endangered vital industries of the USA. The question is: Is health care for the people, also an essential industry of our nation?

D. C. General and Enron

In the meantime, the connections between the D.C. General scandal and the Enron scandal are becoming more and more difficult to overlook. This connection is not new.

Last year’s Schiller Institute and La Rouche-led mobilizations in defense of the General Welfare, also focused, then, on stopping the energy deregulation and energy piracy associated with Enron and other privateers. LaRouche focused on the case of D.C. General, in battling the HMOs’ “shareholder values” drive to dismantle national health care and offer it up for looting in the same general manner as Enron had been looting the nation’s energy supplies; and that the steel industry, among others, were being similarly looted.

At that time, this mobilization catalyzed hundred of citizens to lobby their Congressmen and state official in Washington and locally, and it threatened to create in Congress and among state official (e.g., California), a reverse paradigm shift, reviving the FDR tradition. Suddenly, at the beginning of June that year, forces in the U.S. Congress were pressured into sinking the hopes of keeping a public, full-service general hospital alive in the capitol of the most powerful nation on this planet.

The McCain Factor

On May 30, 2001, South Dakota Democrat Tom Daschle, who had just become the Senate Majority leader, signed a petition supporting La Rouche’s drive to save D. C. Hospital, entitled, “It’s Time To Draw the Line: Saving D.C. General Is a Matter of International Importance.” This signing occurred during a large public gathering. Five other Congressmen had previously signed the petition, and Rep. John Conyers (D.-Mich.) had held a Congressional briefing on the “National Public Hospital Safety-Net Crisis,” which featured LaRouche national spokeswoman Debra Freeman and other speakers from the Coalition to Save D.C. General.

Suddenly, on June 1, 2001, Senators Daschle and McCain met in Arizona. That same day, Daschle sent a fax to the Schiller Institute, asked that his name be removed form the LaRouche statement supporting D.C. General Hospital. On or about this date, the pattern of evidence indicates, a dirty deal was struck in the establishment to “stay away from LaRouche,” and to betray any commitments to the General Welfare – resulting, among other things, in the closing of the hospital one month later.

Rep. Maxine Water (D.-Calif.) tacitly acknowledged this at a November 14, 2001 Congressional briefing on public health care when she stated: “And a lot of people shied away from the D.C. General issue because the LaRouche organization was at the forefront of trying to help us understand what was going on. We should all apologize. And I do now. I apologize because, you are right.”

It has recently come to light that D.C. Mayor Anthony Williams’ campaign has received $480,000 since last July, of which more than 20%, or $98,000, has come from Doctors Community Healthcare Corporation (DCHC), its, hospitals, its employees, and its affiliated businesses. Paul Tufts, CEO of DCHC, also recently made a $500,000 donation, the largest in its history, to the University of the District of Columbia. Tufts was also the sole out-of-area contributor to Eleanor Holmes Norton’s 2000 election campaign, donation the maximum contribution of $1,000.

And, all of this matters, because DCHC is the Arizona outfit which took over, privatized, and dismantled D.C. General Hospital as a result of the illegal shenanigans and manipulations involving second-and-third-tier flunkies of Eleanor Holmes Norton, Tony Williams, and the Congressionally mandated Financial Control Board. All of these forces were operating against the wishes of the medical community, the citizens, and the D.C. City Council. DCHC and its partner company, NCFE, are headquartered in John McCain’s Arizona. They are currently facing lawsuits for racketeering, embezzlement, and fraud in four separate jurisdictions.

What about fourth-tier flunky Ivan Walks, whose flagrant disregard for the truth and the well-being of Washington’s citizens, whose health he was charged with protecting, played an important role in this operation? On Dr. Walks’ watch, two postal workers died during the anthrax incidents last Fall; on his watch, there are at least 75 other individuals, to date, whose deaths may have been caused by their inability to obtain timely and adequate medical care, as a result of the closing of D.C. General Hospital.

Walks will perhaps be remembered best for his comment at a Public Benefit Corporation (D.C. General) Board meeting in July 200, where he callously remarked: “A couple of folks may exsanguinate (bleed to death) on their way to the Washington Hospital Center, if D.C. General is closed.”

Walks has walked, but the scandalous stench of the “Boys from Brazile” – Norton, McCain, and Lieberman – is an odor which will not quickly go away.

LaRouche commented: “It is never over until it’s over. The crass, corrupt, and fully intentional commitment to increase the death-rate among citizens and other residents of the nation’s capitol is a stink hovering around Capitol Hill that will simply not go away until a restoration of the citizens rights to the Constitutional protection of the General-Welfare principle is served, once again, as it was under the former Hill-Burton Law.”

Can't make a connection with NCFE?

The Wall Street Journal: What prompted this book?

T. Boone Pickens: I felt like a lot had happened to me. I left Mesa [Petroleum] in 1996 and the 12 years that followed were the most productive years of my life. Also, I came from a small town in eastern Oklahoma, and I think that I can still reach a young audience who want to know that average intelligence and a good work ethic is all you need.

WSJ: You were in effect fired as CEO of Mesa Petroleum by Richard Rainwater and his wife Darla Moore in 1996. In this book, you settle scores with them, adding the occasional shot to the ribs. What about forgetting and forgiving?

Mr. Pickens: If somebody I don't like gets in the crosshairs, I pull the trigger. But I don't hunt for them. The reason for paying them back is that they couldn't make a professional transition. You want your departure after 40 years to be pleasant, not unpleasant. They did things that were totally unnecessary, so that's why I said what I said.


I wonder what else T. Boone Pickens knows regarding these two and their Financial Investment Firms and our HEALTHCARE SYSTEM. Hmmm......

Toughest Babe in the Business married GW BUSH Partner......

Below is an exerpt posted in this week's Newsweek : http://www.newsweek.com/id/151727/page/2
The Pickens Profile You Haven't Read

Pickens likes to portray his years as a corporate buccaneer during the 1980s as "shareholder activism." When Mesa fell into a cash crisis in the mid '90s after the price of natural gas collapsed, there was no mercy for him on Wall Street. Pickens called in Texas financier Richard Rainwater, and his wife and business partner, Darla Moore, to help raise capital. (Rainwater helped another oilman, George W. Bush, escape his money problems by making him co-owner of the Texas Rangers, a deal that eventually made Bush a multimillionaire.)


Moore, a leveraged-buyout specialist dubbed "the Toughest Babe in the Business" by Fortune, tried to raise $1 billion on Wall Street for Mesa. "I found out there wasn't a bank in the country that would touch the deal if Boone was CEO," Moore told NEWSWEEK. "I tried to soften the message [but] he was really surprised. 'But I get along with all those guys,' is what he said." The Rainwaters worked out a deal for Pickens to retire as CEO, and bought him out, a deal that still rankles the billionaire. Moore whooped with surprise when told by a NEWSWEEK reporter that Pickens had compared her in his book to a "wolverine that pisses on everything it doesn't eat." Moore responds, "I think what people don't know about Boone is that deep down he is actually—I hate to say this—a nice man. And he knows more about energy than anybody in the world."

Just a little insight to Darla Moore;
Darla Moore In 1981, at Chemical Bank in New York, Moore and Conway were focused on a new idea: loaning money to corporations
teetering on the brink of bankruptcy, Soon after, she met and married Rainwater, who made her president of his investment company. They now had $500 million to put wherever they wanted.That's when she pushed T. Boone Pickens out . . . and then to a hard look at Rick Scott.

Scott was Rainwater's good friend. They had bought two hospitals in Texas and shared a vision: a nationwide chain of hospitals using cost controls.

By 1997, Scott's company, Columbia/HCA, was the nation's largest managed care provider.

But Moore said Scott was unwise to ignore subordinates who questioned his practices and foolish to dismiss a federal investigation of how Columbia billed Medicare.




According to the SEC Form :
Med Diversified Inc.
Annual Meeting Of Stockholders
September 9, 2003


JAMES K. HAPP has served as chief executive officer of our subsidiary, Tender Loving Care Health Care Services, Inc., since October 2002.

Previously, Mr. Happ served for three years as executive vice president of NCFE, during which time he restructured the servicer department to improve operational performance and accelerated the utilization of technology to increase operational efficiency. (1999-2002 by deduction of SEC statement)

Mr. Happ also served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc., a home care company with more than 500 locations nationwide 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 participated in the divestiture of all of Columbia/HCA's home care operations (At least1997 until 1999)

Participated in the "DIVESTITURE"...Where did this divestiture 'divest' to?

Accountability:Please......Is this over? Where is the FOUNDER And the LAST MAN STANDING?

What a joke! One would thinkk fromt hsi headline that this case is settled!
Have you forgotten about Poulsen & Happ for the FRAUD? The MOST IMPORTANT part of this CASE has yet to be TRIED and the MEDIA is "PORTRAYING" an end!!
SHAME ON THE MEDIA!!

This is from the website:

http://www.accountability-central.com



Former National Century Financial Enterprises Executives Sentenced for Roles in $3 Billion Securities Fraud Scheme
BY: DEPARTMENT OF JUSTICE


WASHINGTON – Four former National Century Financial Enterprises (NCFE) executives have been sentenced for their roles in a scheme to deceive investors about the financial health of NCFE, Acting Assistant Attorney General Matthew Friedrich and U.S. Attorney Gregory G. Lockhart of the Southern District of Ohio announced today. NCFE, formerly based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.

Donald H. Ayers, 72, of Fort Myers, Fla., an NCFE vice chairman, chief operating officer, director and owner of the company, was sentenced on Aug. 6, 2008, to 15 years in prison for conspiracy, securities fraud and money laundering.

Randolph H. Speer, 57, of Peachtree City, Ga., NCFE’s chief financial officer, was sentenced on Aug. 6, 2008, to 12 years in prison for conspiracy, securities fraud, wire fraud and money laundering.

Roger S. Faulkenberry, 47, of Dublin, a senior executive responsible for raising money from investors, was sentenced on Aug. 7, 2008, to ten years in prison for conspiracy, securities fraud, wire fraud and money laundering.

James E. Dierker, 40, of Powell, Ohio, associate director of marketing and vice president of client development, was sentenced on Aug. 7, 2008, to five years in prison for conspiracy and money laundering.

Rebecca S. Parrett, 59, of Carefree, Ariz., an NCFE vice chairman, secretary, treasurer, director and owner of the company, became a fugitive following the March 2008 jury verdict. She faces a maximum penalty of 75 years in prison and $2.5 million in fines.

U.S. District Court Judge Algenon Marbley also ordered the defendants to forfeit $1.7 billion of property representing the proceeds of the conspiracy and to pay restitution of $2.3 billion.

"In a scheme which lasted for years, these defendants purposely misled the investing public about National Century, its financial health, and the way in which it did business," said Acting Assistant Attorney General Matthew Friedrich. "When the facade collapsed and National Century filed for bankruptcy, investors were left holding the bag for billions of dollars in losses. The sentences handed down in this case justly reflect the gravity of the offenses."

"These sentences mark the end of a nearly six-year march to justice for the architects of the financial house of cards known as National Century," said Gregory G. Lockhart, U.S. Attorney for the Southern District of Ohio. "These crimes touched hundreds of thousands of Americans if they participated in a pension that invested in National Century, or had money in any of the financial institutions who bought securities from National Century."

"Unfortunately today’s sentencing does not immediately restore investor confidence or offer complete financial restitution for the victims of one of the largest corporate fraud investigations," said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division. "The FBI and our law enforcement and regulatory partners will do whatever it takes so that no company, in small town America or major metropolitan cities alike, misrepresents their financial health and defrauds investors."

"The IRS, along with our law enforcement partners, will vigorously pursue corporate officers who victimize their investors and violate the public trust," said Internal Revenue Service (IRS) Chief of the Criminal Investigation Division Eileen Mayer. "Today's sentence demonstrates the government's determination to restore and ensure that trust."

Evidence was presented at trial in February 2008 that the defendants engaged in a scheme to deceive investors and rating agencies about the financial health of NCFE and how investor monies would be used. Between May 1998 and May 2001, NCFE sold notes to investors with a combined value of $4.4 billion, which evidence showed were actually worth approximately six cents on the dollar at the time of NCFE’s bankruptcy in November 2002.

Court documents show that NCFE presented a business model to investors and rating agencies that called for NCFE to purchase high-quality accounts receivable from healthcare providers using money NCFE obtained through the sale of asset-backed notes to institutional investors. Evidence at trial showed that the defendants knew that the business model NCFE presented to the investing public differed drastically from the way NCFE did business within its own walls and that NCFE was making up the information contained in monthly investor reports to make it appear as though NCFE was in compliance with its own governing documents.

Ayers, Speer, Faulkenberry, Dierker and Parrett were five of eight individuals indicted in the case in July 2007. Lance K. Poulsen was severed from the other defendants following his arrest on obstruction of justice charges on Oct. 18, 2007. He will be sentenced on the obstruction of justice charges on Aug. 8, 2008. Poulsen’s trial on conspiracy, securities fraud, wire fraud, mail fraud and money laundering charges is scheduled to begin Oct. 1, 2008. James K. Happ, a certified public accountant and former executive vice president for servicer operations will face charges of conspiracy and wire fraud at trial scheduled to begin Dec. 1, 2008. Jon A. Beacham, who was responsible for raising money from investors through the sale of notes, pleaded guilty to conspiracy and securities fraud on July 13, 2007, and awaits sentencing.

The case was prosecuted by Assistant U.S. Attorney Douglas Squires of the Southern District of Ohio, Senior Litigation Counsel Kathleen McGovern and Trial Attorney Wes R. Porter of the Criminal Division's Fraud Section, with assistance from Fraud Section Paralegal Specialists Crystal Curry and Sarah Marberg. The investigation was conducted by FBI agents Matt Daly, Ingrid Schmidt and Tad Morris; IRS Inspectors Greg Ruwe and Mark Bailey; U.S. Postal Inspector Dave Mooney; and U.S. Immigration and Customs Enforcement agent Celeste Koszut.

Federal Judge Algenon L. Marbley, however, sentenced Poulsen, 65, to 10 years in a federal prison.....but what is next?

NATIONAL CENTURY CASE
Apologetic executive gets 10 years
Saturday, August 9, 2008 3:10 AM
By Jodi Andes

THE COLUMBUS DISPATCH

Poulsen


Demmler
Minutes before Lance K. Poulsen was sentenced for trying to bribe the star witness in the nation's largest private-fraud case, he apologized.

Yesterday, nearly all objections made by Poulsen's attorneys to keep their client from a long prison term were shot down by the judge in three hours of debate.

Poulsen was then given the option to speak before he was sentenced for witness tampering and obstruction of justice.

Shackled at the hands and feet, Poulsen offered the first apology for the 2002 demise of Dublin-based National Century Financial Enterprises, where 350 employees lost their jobs and investors lost more than $2 billion.

"I want to express my remorse. I have had many months of imprisonment to consider my conduct," Poulsen said. "But there is no question that NCFE's failure hurt many families.

"These were good people employed at NCFE and now have no future. There is no question that NCFE was my company. … I was ultimately responsible for my company's welfare and their welfare."

The statements followed a tearful plea from Poulsen's wife, Barbara, to the judge.

"He is sincere and unselfish in his motives. I truly believe he is a really good man," she said, crying. "I just ask for your leniency in the sentencing."

The most common sentence for such crimes is less than two years in prison, Poulsen's attorney Pete Anderson noted.

Federal Judge Algenon L. Marbley, however, sentenced Poulsen, 65, to 10 years in a federal prison.Authorities said that Poulsen, who was one of the founders of National Century, and his friend Karl A. Demmler tried to get Sherry Gibson, the government's star witness in National Century's fraud case, to fake amnesia. FBI agents tapped phone conversations and had Gibson wear a recording device.

The scheme showed that Poulsen was the puppeteer and Demmler his puppet, Marbley said. "This was an egregious offense that goes to the integrity of the judicial process," he said.

National Century collected accounts receivable for health-care providers for a fee. The company went bankrupt after offering hundreds of millions of dollars in unsecure loans to health-care providers.

Demmler, 57, was to be sentenced yesterday on the same charges. But his attorney was granted a continuance for a psychological report, saying Demmler is becoming mentally unstable. Demmler has told jail workers that he drinks his urine.

Poulsen was the fifth National Century employee to be sentenced this week. The other four and their prison terms: Donald H. Ayers, 72, 15 years; James E. Dierker Jr., 40, five years; Roger Faulkenberry, 47, 10 years; and Randolph H. Speer, 57, 12 years.


A sixth defendant, Rebecca S. Parrett, disappeared after she was convicted.

Poulsen also faces fraud charges and is scheduled for trial Oct. 1.

jandes@dispatch.com

James K Happ, NCFE, and WHERE did thisman come from?

Source : ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 9, 2003-Med Diversified Inc.

Mr. Happ also served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc., a home care company with more than 500 locations nationwide 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 participated in the divestiture of all of Columbia/HCA's home care operations.

Funny,,,,,He left Columbia/HCA and went to NCFE for a brief stay....but what was his purpose to be at NCFE. After all, he was only there for a BRIEF stay, until.....

SMELL A RAT????

Let's look at this:

Happ: 1997 Chief Financial Officer of the Dallas-based Columbia Homecare Group, Inc., /////more than $1 billion in revenue in 1997!!
What was the revenue in 1998? After the Health Care Reform Act was passed in 1997)

What was the Stock Price of the parent company of Columbia Homecare Group, Inc.,, i.e. HCA in 1997, 1998, 1999? How did the market react to the announcement of the "HOMECARE" selloff of HCA's Columbia Homecare Group, Inc.,?

But the bigger question, To Whom did James Happ sell this "HOMECARE" division to? And how did he secure the "FINANCE" for the "DIVESTITURE"? The divestiture that he claimed credit for?

Once again, "In this role, he directed the company through the challenging reimbursement climate, known as the interim payment system, and participated in the divestiture of all of Columbia/HCA's home care operations."

Now this is where it starts getting very interesting!

OK.....Happ leaves HCA, after selling off the LOSING HOMECARE FACILITIES via NCFE FUNDING...for which that compnay filed Bankruptcy July 1999.

How did a company with more than $1 billion in revenue in 1997 sell in 1998 to a compnay that filed bankruptcy in 1999 with NO RECORD of the actual amount paid for these LOSERS or FINANCED BY NCFE and family!!!

And the DOJ states this CASE has come to an END? I think not!

Judge Algenon Marbley ..."eligible to serve 35 years in prison but said .....

said that duration would have been an excessive sentence.

Friday, August 8, 2008 - 2:09 PM EDT | Modified: Friday, August 8, 2008 - 2:15 PM
NCFE’s Poulsen gets 10 years on witness tampering attempt
Business First of Columbus - by Kevin Kemper

Lance Poulsen, who once headed the former National Century Financial Enterprises Inc., was sentenced Friday to 10 years in prison and a fine for trying to get a witness to change her testimony at his upcoming fraud trial linked to the company’s collapse.

U.S. District Court Judge Algenon Marbley handed down the sentence, ordering prison time as well as a $17,500 fine.

“This was an egregious offense,” Marbley said. “It goes to the integrity of the judicial process.”

Marbley also sentenced Poulsen, who co-founded National Century, to three years of supervised release once he completes his time in jail.

Poulsen was eligible to serve 35 years in prison. Marbley said that duration would have been an excessive sentence.

A jury found Poulsen, 65, guilty in March of attempting to bribe Sherry Gibson, a former National Century employee and federal witness, into changing her testimony for an upcoming trial in which Poulsen is accused of fraud. Poulsen was convicted of conspiracy to obstruct justice, witness tampering, witness tampering by influencing testimony and corruptly persuading a federal witness.

His friend Karl Demmler, once the owner of a Dublin tavern, was convicted on the same counts. Demmler will be sentenced at a later date.

Poulsen still must stand trial on fraud charges stemming from the 2002 collapse of National Century. Shortly before his witness tampering trial, five executives of the former company were convicted on charges stemming from the government’s claim that as much as $2.89 billion from investors was lost in a fraud they conducted at the company.

Four of those executives were sentenced this week. Rebecca Parrett, also convicted, disappeared from her Arizona home where she was sent to await sentencing. Government officials continue to search for her.

Raising objections
When U.S. marshals led a shackled Poulsen into the courtroom Friday, he mouthed “thank you” to supporters in the gallery. During a break in the hearing, he turned around in his chair to smile and wink at his wife.

Before Marbley sentenced Poulsen, attorneys for the government and the former executive sparred over a presentence investigation report. Lawyer William Terpening criticized the report’s recommendation that Poulsen serve more time in prison because of the loss investors suffered in National Century’s failure. The report, Terpening said, alleges investors suffered billions of dollars in losses but it doesn’t take into account money the government recovered.

The money recovered since National Century’s bankruptcy should not be counted against the total loss, said Leo Wise, an attorney for the government, because it was recovered without help from Poulsen. Marbley agreed with government.

Terpening also argued that the report’s assertion that sophisticated means used in the fraud should be considered when sentencing Poulsen is incorrect because the former CEO hasn’t been convicted of fraud. Marbley said he found those so-called sophisticated means were used in not just the crime proven in the trial that Poulsen tried to influence, but also in the witness tampering case.

“They went to great lengths to avoid detection,” Marbley said of Poulsen and Demmler and a complicated transfer of money the two had planned.

How did James K Happ Arrive at NCFE? Better yet.....

WHY did James K Happ work at NCFE? Where did this man come from before he arrived at NCFE? and WHEN? Why is James K Happ the LAST MAN STANDING TRIAL?
December,,,,,,,AFTER THE ELECTION......Think there is no connection?

James K. Happ, a certified public accountant and former executive vice president for servicer operations......



"In a scheme which lasted for years.....
"These sentences mark the end of a nearly six-year march to justice.....

DOJ : "These sentences mark the end..."
THE END ? What about trials in October and more importantly December ....
Just like the "Market Analysts" MISSED this SCHEME.....(Not sure if that is true)
But we must question if our '4th ARM of Government'(Journalists) Missing the TRUE ACCURATE SCHEME!

Now with statements like this, "When National Century collapsed in November 2002, more than 275 health-care providers ..." one could think that NCFE was the responsible sole party for the Bankruptcyof 275 health-care provders.....

But what 'financial state' were these providers in when they SOLD their Receivables in the first place? How much was NCFE promising for their receivables? Pennieson the dollar? WAKE UP!!!

FOR IMMEDIATE RELEASE
Thursday, August 7, 2008
WWW.USDOJ.GOVCRM
(202) 514-2007
TDD (202) 514-1888

Former National Century Financial Enterprises Executives Sentenced for Roles in $3 Billion Securities Fraud Scheme
WASHINGTON – Four former National Century Financial Enterprises (NCFE) executives have been sentenced for their roles in a scheme to deceive investors about the financial health of NCFE, Acting Assistant Attorney General Matthew Friedrich and U.S. Attorney Gregory G. Lockhart of the Southern District of Ohio announced today. NCFE, formerly based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.

Donald H. Ayers, 72, of Fort Myers, Fla., an NCFE vice chairman, chief operating officer, director and owner of the company, was sentenced on Aug. 6, 2008, to 15 years in prison for conspiracy, securities fraud and money laundering.

Randolph H. Speer, 57, of Peachtree City, Ga., NCFE’s chief financial officer, was sentenced on Aug. 6, 2008, to 12 years in prison for conspiracy, securities fraud, wire fraud and money laundering.

Roger S. Faulkenberry, 47, of Dublin, a senior executive responsible for raising money from investors, was sentenced on Aug. 7, 2008, to ten years in prison for conspiracy, securities fraud, wire fraud and money laundering.

James E. Dierker, 40, of Powell, Ohio, associate director of marketing and vice president of client development, was sentenced on Aug. 7, 2008, to five years in prison for conspiracy and money laundering.


Rebecca S. Parrett, 59, of Carefree, Ariz., an NCFE vice chairman, secretary, treasurer, director and owner of the company, became a fugitive following the March 2008 jury verdict. She faces a maximum penalty of 75 years in prison and $2.5 million in fines.

U.S. District Court Judge Algenon Marbley also ordered the defendants to forfeit $1.7 billion of property representing the proceeds of the conspiracy and to pay restitution of $2.3 billion.

"In a scheme which lasted for years, these defendants purposely misled the investing public about National Century, its financial health, and the way in which it did business," said Acting Assistant Attorney General Matthew Friedrich. "When the facade collapsed and National Century filed for bankruptcy, investors were left holding the bag for billions of dollars in losses. The sentences handed down in this case justly reflect the gravity of the offenses."

"These sentences mark the end of a nearly six-year march to justice for the architects of the financial house of cards known as National Century," said Gregory G. Lockhart, U.S. Attorney for the Southern District of Ohio. "These crimes touched hundreds of thousands of Americans if they participated in a pension that invested in National Century, or had money in any of the financial institutions who bought securities from National Century."


"Unfortunately today’s sentencing does not immediately restore investor confidence or offer complete financial restitution for the victims of one of the largest corporate fraud investigations," said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division. "The FBI and our law enforcement and regulatory partners will do whatever it takes so that no company, in small town America or major metropolitan cities alike, misrepresents their financial health and defrauds investors."


"The IRS, along with our law enforcement partners, will vigorously pursue corporate officers who victimize their investors and violate the public trust," said Internal Revenue Service (IRS) Chief of the Criminal Investigation Division Eileen Mayer. "Today's sentence demonstrates the government's determination to restore and ensure that trust."


Evidence was presented at trial in February 2008 that the defendants engaged in a scheme to deceive investors and rating agencies about the financial health of NCFE and how investor monies would be used. Between May 1998 and May 2001, NCFE sold notes to investors with a combined value of $4.4 billion, which evidence showed were actually worth approximately six cents on the dollar at the time of NCFE’s bankruptcy in November 2002.

Court documents show that NCFE presented a business model to investors and rating agencies that called for NCFE to purchase high-quality accounts receivable from healthcare providers using money NCFE obtained through the sale of asset-backed notes to institutional investors. Evidence at trial showed that the defendants knew that the business model NCFE presented to the investing public differed drastically from the way NCFE did business within its own walls and that NCFE was making up the information contained in monthly investor reports to make it appear as though NCFE was in compliance with its own governing documents.

Ayers, Speer, Faulkenberry, Dierker and Parrett were five of eight individuals indicted in the case in July 2007. Lance K. Poulsen was severed from the other defendants following his arrest on obstruction of justice charges on Oct. 18, 2007. He will be sentenced on the obstruction of justice charges on Aug. 8, 2008. Poulsen’s trial on conspiracy, securities fraud, wire fraud, mail fraud and money laundering charges is scheduled to begin Oct. 1, 2008. James K. Happ, a certified public accountant and former executive vice president for servicer operations will face charges of conspiracy and wire fraud at trial scheduled to begin Dec. 1, 2008. Jon A. Beacham, who was responsible for raising money from investors through the sale of notes, pleaded guilty to conspiracy and securities fraud on July 13, 2007, and awaits sentencing.

The case was prosecuted by Assistant U.S. Attorney Douglas Squires of the Southern District of Ohio, Senior Litigation Counsel Kathleen McGovern and Trial Attorney Wes R. Porter of the Criminal Division's Fraud Section, with assistance from Fraud Section Paralegal Specialists Crystal Curry and Sarah Marberg. The investigation was conducted by FBI agents Matt Daly, Ingrid Schmidt and Tad Morris; IRS Inspectors Greg Ruwe and Mark Bailey; U.S. Postal Inspector Dave Mooney; and U.S. Immigration and Customs Enforcement agent Celeste Koszut.

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