One person contributed to this 'MASSIVE ' Cover up? Really?

"This case is about lies and cover-ups," Squires said. "This case is about Lance Poulsen and how Lance Poulsen promised one thing and did another, and how Lance Poulsen orchestrated a cover-up, a massive cover-up."


Prosecutor: Former CEO in Ohio lied to investors
By JULIE CARR SMYTH 10.02.08, 12:54 PM ET

COLUMBUS, Ohio - The former chief executive of a failed health care financing company fabricated company data, kept two sets of books and lied to investors, a federal prosecutor said Thursday during opening statements of a $1.9 billion corporate fraud trial.

Lance Poulsen, founder of National Century Financial (other-otc: CYFL.PK - news - people ) Enterprises, misused investors' money and broke promises, said Assistant U.S. Attorney Doug Squires. Authorities have likened the case to a privately held-company version of the Enron or WorldCom scandals.

"This case is about lies and cover-ups," Squires said. "This case is about Lance Poulsen and how Lance Poulsen promised one thing and did another, and how Lance Poulsen orchestrated a cover-up, a massive cover-up."Poulsen, 65, has pleaded not guilty. He's characterized himself as a rags-to-riches success story whose legitimate business was destroyed by the government.

A jury in March convicted five of Poulsen's co-defendants of multiple charges of fraud and money laundering.

Defense attorney William Terpening told jurors a lot of the case against Poulsen boils down to a misunderstanding.

He said major auditing firms, law firms, banks and rating agencies were involved in monitoring the company.

"We do want to point out that if anything was wrong at National Century Financial Enterprises in terms of actual fraud, wouldn't someone have raised their hands?" Terpening said.

The government will show evidence that Poulsen kept two sets of books and signed off on falsified reports, Squires said. Investors also planned to testify against Poulsen.

Terpening said every government witness has a vested interest in providing testimony.

"When things fell apart, everyone wanted something to blame," he said.

Poulsen was convicted in March of conspiracy, witness tampering and obstruction of justice for trying to bribe a former employee expected to testify against him. He was sentenced in August to 10 years in prison.

Poulsen founded National Century Financial Enterprises in Dublin, Ohio, in the early 1990s.

The business offered financing to small hospitals, nursing homes and other health care providers by purchasing their accounts receivable, usually for 80 or 90 cents on the dollar, so they wouldn't have to wait for insurance payments. National Century then collected the full amount of the payments.

The company raised the money to fund its business by selling bonds to investors. It declared bankruptcy in 2002 after the FBI raided its offices.


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