National Century had advanced millions of dollars to health-care providers who had no collateral or means to pay back the money

But the real question should be: What "PROVIDERS" received the money and why were they chosen? Where does James K Happ come from? Oh yes, Columbia Homecare Group.
HCA & family dumped/sold their losing entities (Homecare)onto NCFE, shortly after the Healthcare Reform Bill passed !

"...National Century had advanced millions of dollars to health-care providers who had no collateral or means to pay back the money..."

"Auditors and ratings agencies were never allowed in the building unescorted and were never told that National Century had advanced millions of dollars to health-care providers who had no collateral or means to pay back the money,"

Audit data falsified, former VP tells court
National Century execs faked case folders, Gibson testifies
Tuesday, October 21, 2008 3:14 AM
By Jodi Andes

THE COLUMBUS DISPATCH
Employees of health-care lender National Century Financial Enterprises developed many ways to circumvent ratings agencies and auditors, the government's key witness said yesterday in the trial of its former leader, Lance K. Poulsen.

Jurors in the federal fraud trial in Columbus also learned from former company Vice President Sherry Gibson that she had been offered a bribe by Poulsen to "develop amnesia."

Poulsen, former chief executive of Dublin-based National Century, is accused of several counts of fraud in the company's 2002 collapse that cost investors close to $2 billion.

In March, Poulsen was convicted of witness-tampering and obstruction charges, with federal prosecutors presenting evidence that Poulsen used Karl A. Demmler, a mutual friend, to offer Gibson a bribe to "forget" information that could be used against Poulsen in the current trial.

However, Poulsen attorney William Terpening questioned yesterday whether his client was involved, given that Gibson didn't talk to Poulsen directly. He also questioned Demmler's mental stability.

After also being convicted of witness-tampering and obstruction charges, Demmler has become increasingly paranoid and has drunk his own urine in jail, Demmler's attorney has said in court documents.

"So, your only contact with Mr. Poulsen was with a crazy guy who thinks the government is out to get him," Terpening said.

Gibson said she hadn't talked to Poulsen directly since before the company collapsed in November 2002. At that time, she was overseeing the company's compliance department and was in charge of handling random audits.

National Century bought accounts receivable from health-care providers to give them operating money. Money for the purchases came from the sale of notes to private investors.

The investors required National Century to undergo audits from rating agencies and auditors. National Century's financial books had been falsified for years, Gibson said, and executives had ways to get around the audits.

For example, she would escort ratings-agency staff members through the building and take them to a National Century processor who had been chosen in advance, Gibson told government attorney Leo Wise.

The processor would have what appeared to be a file of a health-care-company client, but Gibson and others had put in false numbers that concealed the amount of money National Century had advanced the client, she said.

"Oh, here's Nikki. I see she's working on something. Let's see what she is doing," Gibson said, giving jurors an example of the tours. "I made it seem like it was a normal day for these processors."

Auditors and ratings agencies were never allowed in the building unescorted and were never told that National Century had advanced millions of dollars to health-care providers who had no collateral or means to pay back the money, she said.

jandes@dispatch.com