Federal prosecutors had not done their job

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.
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Before ENRON, before the Mortgage Fraud, what about the Healthcare Finance Fraud?

JULY 10, 2007
FOR IMMEDIATE RELEASE
http://www.usdoj.gov/usao/ohsn
SUPERSEDING INDICTMENT CHARGES FORMER EXECUTIVES OF HEALTH CARE FINANCING COMPANY WITH CONSPIRACY, FRAUD, MONEY LAUNDERING
"...superseding indictment charging eight former executives of National Century Financial Enterprises (NCFE) with conspiring to defraud investors by diverting millions of dollars in investors' funds, fabricating data in investor reports, and moving money back and forth between accounts in order to conceal investor fund shortfalls. NCFE, based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States ..." before FBI raided the office in Dublin, Oh.

“This case is one of the largest corporate fraud investigations involving a privately held company headquartered in small town America,” said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division.

JPMORGAN CHASE and CITI PAID GOVERNMENT SETTLED AGREEMENTS FOR FRAUD in National Century Financial Enterprises, Inc. (NCFE), the “LARGEST ‘PRIVATE’ FINANACIAL FRAUD CASE “in our nation's history

February 3, 2008- THE COLUMBUS DISPATCH
By the numbers
All defendants, except for James K Happ, were initially indicted in May, 2006. United States District Judge Algenon L. Marbley will preside over the case which is scheduled for trial on November 5, 2007. National Century Financial Enterprises (NCFE)

Friday, February 8, 2008- Business First of Columbus - Business First
Poulsen isn't the only National Century executive scheduled for a trial apart from the five now in court. James Happ is scheduled for trial in October because "he wasn't charged in connection with the company's failure until last May."

"All defendants, except for Happ...?"

At trial, the government presented evidence that the defendants engaged in a scheme to deceive investors and rating agencies about the financial health of NCFE and how investor monies would be used between May 1998 and May 2001.
Note: May 1998 James K Happ was the chief financial officer of the Dallas-based Columbia Homecare Group, Inc. and used NCFE to finance his divestiture of Columbia Homecare Group’s losing assets, homecare. . , "All defendants, except for Happ...?"

Mr. Happ, as chief financial officer of the Dallas-based Columbia Homecare Group, Inc., a home care company with more than 500 locations nationwide and more than $1 billion in revenue in 1997 directed the company through the challenging reimbursement climate, … and participated in the divestiture of all of Columbia/HCA's home care operations.

1998-1999 Who financed this divestiture? NCFE- National Century Financial Enterprises.
Where did James K Happ divest the losing assets of Columbia Homecare Group, Inc? One man owned company, Medshares, Inc. in Memphis, TN. A ‘private’ company financed by a ‘private’ financial institution, NCFE.

In July 1999, Medshares, Inc. filed the LARGEST Bankruptcy case in the history of Western Tennessee's bankruptcy court held all of the Dallas-based Columbia Homecare Group, Inc.’s home care units . All entities filed with the court were financed by NCFE. In this courtroom, documents reveal the uproar from scores of lawyers crying fraud in the bankruptcy court and the BANKRUPTCY JUDGE scolded the attorneys and forbade the ‘F’ word in her court. (NO FRAUD)

February 21, 2008 - Associated Press
COLUMBUS, Ohio (AP) - A guilty executive told jurors she told investors "absolutely nothing" about National Century's practices of advancing cash to Memphis, Tenn.-based Medshares, a home-health care provider.

Thursday, December 18, 2008 - National Century fraud case produces 1st acquittal
Prosecutors' case fell short, juror says
By Jodi Andes THE COLUMBUS DISPATCH
The "not guilty" verdicts that came in federal court yesterday were not so much a vindication of the last National Century Financial Enterprises executive to stand trial, a juror said.
Instead, they were more a belief that federal prosecutors had not done their job, the juror said after he
and his fellow jurors acquitted James K. Happ of five counts after 12 hours of deliberation. "He very well may have been guilty. A lot of us thought he was," said the juror who wouldn't give his name. "But if he was, you gotta have the evidence."

James K Happ was the chief financial officer of the Dallas-based Columbia Homecare Group, Inc. prior to arriving at NCFE and the ONLY executive of NCFE ACQUITTED.