James K. Happ's prior employment at Columbia Homecare Group was the purpose for his move to NCFE.

Keep in mind, this man James K Happ was responsible for DUMPING the publicly traded LOSING assets of HCA and friends into this 'PRIVATE' INVESTMENT FIRM!



Testimony against former executive

Ex-client tells of his threat to tattle

Thursday, December 11, 2008 3:19 AM
By Jodi Andes

THE COLUMBUS DISPATCH

A former chief executive officer of one of National Century Financial Enterprise's overfunded clients used to boast about his relationship with the mob.

Frank Magliochetti was a personal friend of James K. Happ's. Happ is the last of the National Century executives to be tried for fraud tied to the company's 2002 collapse that cost investors billions of dollars.

Happ faces charges of conspiracy, money laundering conspiracy and three counts of wire fraud in U.S. District Court in Columbus.

Federal prosecutors Doug Squires and N. Nathan Dimock used Magliochetti to try to show that Happ was aware of the fraud, though he worked for only about two years at the Dublin-based company.


Magliochetti was chief executive officer of Med Diversified, which was owned in large part by National Century's top three executives, Lance K. Poulsen, Donald H. Ayers and Rebecca S. Parrett.

Magliochetti testified that he once used knowledge he gained from Happ and other National Century executives to force Poulsen to settle a debt. After waiting two years for Poulsen to pay $15 million that had been owed to him, Magliochetti said he sent Poulsen a threatening e-mail in 2001.

"The innuendo was I would go to the rating agencies and the authorities and I would let them know what was going on at NCFE, the fraud," he said. "I was a non-employee of NCFE, but I knew just about everything that Mr. Happ, Mr. (Roger) Faulkenberry and the rest (of the executives) knew."

Magliochetti said he was paid the money.

Craig A. Gillen, Happ's attorney, questioned Magliochetti's truthfulness and character.

Magliochetti, he noted, admitted making up anonymous lies about co-workers on Internet message boards. He also pleaded guilty to falsifying his taxes and a stock scam that netted him $330,000.

And Magliochetti has lied before to federal Judge Algenon L. Marbley, Gillen contended.

He was one of the health-care providers who appeared before Marbley after National Century's collapse, asking that their money be released.

On the stand previously, Magliochetti said he didn't know anything about Med Diversified's subsidiaries, Chartwell and Tender Loving Care, receiving any unmerited advances from National Century, Gillen noted.

"Another lie for Mr. Magliochetti, right?" Gillen asked. "Did you ever tell this court, that at the time, TLC had been given $99 million in excess of the accounts receivables that were purchased?"

"I was never asked that question," Magliochetti said.

The former CEO testified, though, that he is not the same man as he was when he bragged about having a relationship with the mob.

"I would say that it is part of the bravado that went with certain circumstances," Magliochetti said.

jandes@dispatch.com