James K Happ...From Columbia HCA to NCFE....NO CONFLICT? NO SALE of Columbia to NCFE...via Bankruptcy Court in Western Tennessee

Wednesday, December 17, 2008
Final National Century exec acquittedBusiness First of Columbus


James Happ will not share his former work colleagues’ fate.

Happ, an accountant and former vice president of servicer operations for Dublin-based National Century Financial Enterprises Inc., has been found not guilty of a count each of conspiracy and money laundering conspiracy and three counts of wire fraud.

A 12-member jury at the U.S. District Court in Columbus returned the verdict Wednesday afternoon after a day-and-a-half of deliberations.

Happ was the seventh former executive from National Century to go to trial and the only one to be acquitted. Six former executives were convicted of fraud and four pleaded guilty. Happ was the eleventh and final National Century employee to face criminal charges.

Happ’s trial began Dec. 1 and ended just two weeks later after his defense attorneys declined to put any witnesses on the stand.

In opening arguments, attorney Craig Gillen told jurors that Happ never had a hand in any wrongdoing at the company.

“Jim Happ never told a lie to any investors. Period,” Gillen said.

Happ stood trial on accusations he was part of an executive-level cabal at the medical financing company that defrauded investors for years. A financier for health-care providers like doctors’ offices and hospitals, National Century’s bread and butter was buying accounts receivable from care providers at a discount, then securitizing the receivables into AAA-rated bonds for sale to investors. At its peak, the company employed more than 350 at its office campus in Dublin while recording annual revenue of more than $250 million.

The government has alleged National Century collapsed after running a sophisticated pyramid scheme that fell apart. In addition to purchasing legitimate accounts receivable, the government alleged National Century funded companies owned by its founders without getting receivables in return, effectively making risky unsecured loans with investor cash. The company charged its clients for those advances, the government has said, which inflated National Century’s revenue and generated bonuses for senior executives.

Government attorneys argued that Happ, as the firm’s chief accountant and head of servicer operations, was responsible for making sure that purchased accounts receivable were eligible. In a July 2007 indictment, the government alleged that Happ improperly advanced as much as $5.4 million to a company owned by NCFE founder Lance Poulsen.

The government also accused Happ of ordering a National Century subordinate to remove safeguards on the company’s computer system relative to a health-care provider he planned to join after leaving National Century.