"...state of Arizona, lost millions..."

As fraud cases go, the National Century Financial Enterprises case ranks up there with Enron and WorldCom, prosecutors say.

National Century's collapse never gained much attention outside business circles, largely because it was a privately held company. But some, such as large pension funds and the state of Arizona, lost millions.

"I always say it's the largest, most significant case you've never heard of," said Kathy Patrick, an Arizona attorney representing 30 clients who lost a total of $1.6 billion.



Trials in huge fraud case to begin
Sunday, February 3, 2008 3:32 AM
By Jodi Andes

THE COLUMBUS DISPATCH

National Century co-founder and former chief executive Lance K. Poulsen's lifestyle afforded him the use of a 60-foot yacht.

By the numbers $4.4 billion invested in National Century in its last four years
$1.9 billion lost by investors 10 million-plus documents compiled by prosecutors preparing for three fraud trials 45 prosecution witnesses 5 defendants who could go to prison for life if convicted of all charges As fraud cases go, the National Century Financial Enterprises case ranks up there with Enron and WorldCom, prosecutors say.
Investors in the Dublin-based company lost more than $1.9 billion after the financing giant filed for bankruptcy in 2002. And at least 275 health-care companies collapsed, putting thousands out of work and affecting thousands of patients.

National Century's collapse never gained much attention outside business circles, largely because it was a privately held company. But some, such as large pension funds and the state of Arizona, lost millions.

"I always say it's the largest, most significant case you've never heard of," said Kathy Patrick, an Arizona attorney representing 30 clients who lost a total of $1.6 billion.
By comparison, the scandals that destroyed publicly traded Enron and WorldCom hit thousands of stockholders. The Enron scandal wiped out 5,600 jobs and $2.1 billion in pensions and destroyed $60 billion in market value. The $11 billion WorldCom accounting fraud resulted in investor losses estimated at $180 billion, and it put more than 20,000 people out of work and destroyed their retirement funds.

Eleven people have been charged in connection with the National Century collapse. Four already have pleaded guilty and agreed to testify against the others.

The rest will defend themselves in four trials that are expected to span most of the year. The first starts Monday, and the last is scheduled to begin on Oct. 1.

Former CEO and co-founder Lance K. Poulsen is to be tried twice -- on March 7, with a co-defendant, on a charge of witness tampering, and again on Aug. 4, on charges of fraud, conspiracy and money laundering.

The trial that starts on Monday is expected to last at least two months. Facing charges ranging from conspiracy to money laundering are the other two co-founders, Rebecca S. Parrett and Donald H. Ayers, as well as former executives Randolph H. Speer, Roger S. Faulkenberry and James E. Dierker. If convicted on all charges, all but Dierker could be sentenced to life in prison.

At 39, Dierker is the youngest defendant. He could be sentenced to 25 years in prison if convicted.

Those familiar with the case say it is one to watch because of its immediate and continuing effect on the national economy.