JPMorgan Chase, Citi, Bank of America, Goldman Sachs, ....

MORE PONZI SCHEMES? THIS NEEDS TO END! WAKE UP AMERICA!
JPMorgan and CITI were found GUILTY of contributing to the ENRON PONSI SCHEME.
JPMORGAN CHASE and CITI PAID GOVERNMENT SETTLED AGREEMENTS FOR FRAUD in our nation's “LARGEST ‘PRIVATE’ FINANACIAL FRAUD CASE “ in our history! National Century Financial Enterprises, Inc. (NCFE) Federal prosecutors proclaimed “no one has ever heard of” this case. I believe that was intentional. (DOJ case ended 2008)

This month, FEBRUARY ‘09, although the DOJ’s NCFE case ended in December 2008, we now have ‘Credit Suisse Securities LLC has asked the court overseeing litigation over the collapse of health care lender National Century Financial Enterprises Inc. to sanction Lloyds TSB Bank PLC for allegedly hiding a deal with Moody's Investor Services Inc…’

December 2008, at the last trial of NCFE in Columbus, Ohio, ALL executives EXCEPT ONE, was acquitted. Funny, Mr. Happ was the last executive to go on trial, even after the so-called master mind, CEO Lance Poulsen.

Mr. James K Happ, the ONE and ONLY EXECUTIVE acquitted in this trial that NO ONE HAS EVER HEARD OF. Who is Mr. James K Happ?

Mr. James K Happ was the CFO at Richard Rainwater's Columbia Homecare Group prior to arriving at National Century Financial Enterprises, Inc. (NCFE)

As CFO at Columbia Homecare Group, Mr. James K. Happ was responsible for divesting the ‘losing assets’ of a publicly traded company’s homecare segment via NCFE's financing. The alleged divestiture was a sale to a 'PRIVATE' company, Medshares, Inc. Medshares was a healthcare company that was already under investigation for MEDICARE/MEDICAID FRAUD. Medshares acquired this divestiture and six months or so later, filed bankruptcy.

Associated Press - February 21, 2008
COLUMBUS, Ohio (AP) - A former executive of NCFE says the company withheld financial information from its investors. Sherry Gibson testified Thursday in federal court in the government's securities fraud case against five former owners and executives of National Century Financial Enterprises.
The government alleges the five schemed to defraud investors of $1.9 billion.
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.

National Century executives also had voting control of Medshares stock. National Century wired that company $93 million without receivables during that same time frame.

The last trial in the “LARGEST ‘PRIVATE’ FINANACIAL FRAUD CASE “in our history, the one and only executive, James K Happ gets his acquittal. According to the jurors, “The PROSECUTOR did not do his JOB!”

The LARGEST CORPORATE BANKRUPTCY ever filed in Memphis, TN was filed by Medshares, Inc. in 1999.

If one searches the court records, the outcry from so many lawyers of fraud were only to be scolded by the judge and warned not to use the "F" word in her court.

Office of Public Liaison & Intergovernmental Affairs...My comment

OPL-IGA
Office of Public Liaison & Intergovernmental Affairs (OPL-IGA) is the front door to the White House through which everyone can participate and inform the work of the President


Comment sent:
Please, do not allow the American people to believe “the low-income housing” was the cause of this. Rep Kanjorski stated it very well. Lack of communication to the American people can or will not be acceptable in this time of crisis. As complicated and complex as this crisis is, to allow the American people to inform themselves through the ‘mainstream’ media venues vs. the ‘state of the art’ tools that could be used is a BIG MISTAKE. There are better ways in 2009. Mainstream media is not the tool to use to gather the support of the American people.
We must remember that the failing healthcare industry was TOO BIG TO FAIL. The Banks that financed these fraudulent corporations were TOO BIG TO FAIL. Were exceptions made to Healthcare Corporations and Financial Institutions fraudulent behaviors because they were TOO BIG TO FAIL?
THURSDAY, JUNE 26, 2003; WWW.USDOJ.GOV;
WASHINGTON, D.C.
HCA Inc. (formerly known as Columbia/HCA and HCA - The Healthcare Company)
LARGEST HEALTH CARE FRAUD CASE IN U.S. HISTORY SETTLED; HCA INVESTIGATION NETS RECORD TOTAL OF $1.7 BILLION
Note: Hospital Corporation of America (HCA) was acquired by Columbia in 1994. Columbia/HCA will pay $71 million to settle a tax dispute with the IRS. The agency had originally sought $276 million in back taxes and interest, in the dispute involving $525 million in stock options deducted by Hospital Corporation of America (HCA). Under the settlement, the IRS will drop charges that HCA, which was acquired by Columbia in 1994, paid unreasonable compensation or golden parachute payments in the form of stock options to more than 100 executives and managers as part of a management-led buyout of HCA in 1989.
10-K SEC Filing, filed by J P MORGAN CHASE & CO on 3/9/2006:
Jul 28, 2003; 2003-87; SEC Settles Enforcement Proceedings against J.P. Morgan Chase and Citigroup
FOR IMMEDIATE RELEASE;

J.P. Morgan Chase Agrees to Pay $135 Million to Settle SEC Allegations that It Helped Enron Commit Fraud;

Citigroup Agrees to Pay $120 Million to Settle SEC Allegations that It Helped Enron and Dynegy Commit Fraud;

Brokaw, Friedman and company also didn’t recognize the obvious danger to the United States that Bush represented in 2000

Predictable Disaster of George W. Bush

By Robert Parry
November 16, 2008


In his trademark goofy way, George W. Bush explained why he supported a bailout of the U.S. financial markets, saying he was “a free-market person, until you're told that if you don't take decisive measures then it's conceivable that our country could go into a depression greater than the Great Depression.”

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So, with a smirk on his face, President Bush explained the predicament that the United States and the world face after eight years of his incompetence and mismanagement – teetering on the edge of a catastrophe “greater than the Great Depression.”

Yet what is remarkable about American news coverage of this extraordinary moment – and Bush’s strangely light-hearted comment at the end of the Nov. 15 global economic summit – is how little blame is being laid specifically at Bush’s door.

In a pattern typical of the preceding eight years, major U.S. journalists are focusing on almost everything else – from Sarah Palin’s political future to what President-elect Barack Obama should do after he’s inaugurated in two months – not the lessons that should be learned from Bush’s disastrous presidency.

An example was Tom Brokaw’s “Meet the Press” on Sunday, which addressed the financial and energy crises with nary a negative word spoken about Bush.

It was as if everyone else was responsible for the nation’s troubles, from unions and auto executives to Congress and Obama (for not providing immediate answers). Just not the person who is still in charge and who was chiefly responsible for taking the United States from an era of peace, prosperity and budget surpluses to the precipice of endless war, economic devastation and national bankruptcy.

Part of that may be that Brokaw and some of his fellow pundits, such as New York Times columnist Thomas Friedman, were major enablers of Bush’s most harmful decisions. Brokaw and Friedman were among the leading journalists in 2002-03 who didn’t ask tough questions about the Iraq invasion and indeed cheered the war on.

Brokaw, Friedman and company also didn’t recognize the obvious danger to the United States that Bush represented in 2000 when he and his Republican allies ran a down-and-dirty campaign against Al Gore and then blocked the counting of Florida’s votes so Bush could slip into the White House.

The big-name pundits almost all bought into the myth that Bush’s strange ascension to the White House -- as the first popular-vote loser in more than a century -- was a good idea, pushing out Bill Clinton’s crowd and putting “the adults back in charge.”

Beyond the affront that Bush’s “election” represented to American democracy, there also was the troubling fact that Bush had a long history of messing up whatever he touched and then “failing upward,” pulled out of trouble by his father’s rich friends.

However, when this well-born wastrel was elevated to the highest office on earth, there was really no way that daddy or daddy’s friends could either control him or save him from himself. It may be that not even all the central banks in all the world can undo the damage that George W. Bush has done.

That big-name American journalists failed to recognize this danger back in Campaign 2000 represented another example of their professional limitations and moral deficiencies. At the time, it was easier to go with the flow.

But the inadequacies of George W. Bush were well-known during Campaign 2000, although readers often had to search out the facts on the Internet or in a few small-circulation liberal magazines. Bush’s ominous history of business failures -- his reverse Midas touch -- drew far less attention than the bogus stories about “Lyin’ Al” Gore and his “exaggerations.”

Warning the Electorate

At Consortiumnews.com, we were among those small outlets that tried to warn the American electorate about these risks. We also recounted this reality in our book, Neck Deep, an excerpt of which follows:

At times grudgingly, George W. Bush traced virtually every early step his father took. Like his father, George W. went to both Phillips Andover Academy and Yale and joined the secretive Yale fraternity Skull and Bones.

Like his father – when starting out on his own career – George W. exploited both wealthy family connections and the nexus between oil and politics. Like his father, too, George W. joined the armed forces during war time.

But George W.’s early record had the look of a child shuffling around in his father’s oversized shoes. In school, George W. was a C student, while his father graduated Phi Beta Kappa. In sports, George the father was captain of the Yale baseball team while George the son was captain of the cheerleading squad.

George Sr. served under fire as a naval aviator in the Pacific theater of World War II, while George Jr. slipped past other better qualified candidates into the Texas Air National Guard where he would avoid service in Vietnam and leave behind long-term questions about his duty records and premature departure.

Bush’s checkered history with the National Guard coincided with a period of his life when he drank heavily and apparently abused cocaine, although he never exactly admitted to that last fact. During his presidential run in 2000, Bush acknowledged the drinking problem – in the context of saying he had licked the bottle with the help of his Christian faith – but he slid away from the cocaine question.

When pressed, he didn’t confirm or deny that he abused cocaine but asserted that he could have met his father’s White House personnel requirement that set time limits on how far back an applicant would have to admit illegal drug use.

Despite this implicit confirmation of drug abuse, most of the major news outlets, such as The New York Times, took Bush’s side and reported that there was no evidence Bush had ever used illegal drugs.

But what he may have lacked in early accomplishments, he made up for in ambition and charm, two traits that served him well in both business and politics. In 1978, his ambition led George W. Bush to embrace his father’s two career paths, oil and politics.

With almost no political experience, George W. launched an uphill campaign for the U.S. Congress in 1978. He lost badly to the Democratic incumbent. That same year, he incorporated his own oil-drilling venture, Arbusto (Spanish for bush) Energy.

George W. Bush’s oil business venture seemed promising at first. Just as his father had done nearly 30 years prior, George W. sought financial assistance from an uncle, this time, Jonathan Bush, a Wall Street financier. Jonathan Bush pulled together two dozen investors to raise $3 million to help launch Arbusto.

James Bath, one of George W.’s friends from the National Guard, also invested $50,000 for a five percent stake. At the time, Bath was the sole U.S. business representative for Salem bin Laden, scion of the wealthy Saudi bin Laden family and half-brother of Osama bin Laden, who in the 1980s would be heading to Afghanistan to help Islamic fundamentalists resist the Soviet invasion.

Though responsible for investments for Salem bin Laden, Bath insisted that the $50,000 for Arbusto came from his own personal funds. (Salem bin Laden could not be questioned about the investment. He died in a 1988 plane crash in Texas.)

A History of Bailouts

In his subsequent business career, George W. was the beneficiary of three major bailouts.

The first occurred in 1982 when, despite the millions already pumped into Arbusto, the company faced a cash crunch. George W.’s balance sheet showed $48,000 in the bank and $400,000 owed to banks and other creditors.

George W. realized that he had to raise additional cash and decided to take Arbusto public. With the company so deeply in debt, however, George W. would need a new infusion of money to clear the books.

In stepped Philip Uzielli, a New York investor and friend of Bush Family lawyer James Baker III from their days at Princeton University. Uzielli worked out a deal with George W. to purchase a 10 percent stake in Arbusto for $1 million, though the entire company was valued at less than $400,000.

In a 1991 interview, Uzielli recalled the investment as a major money loser. “Things were terrible,” he said.

As bad as Uzielli’s investment turned out to be, George W. now had enough money to seek public investors. But first he decided to make one other change. In April 1982, perhaps realizing the negative connotation of “bust” in Arbusto, George W. changed the name of his company to Bush Exploration. The name change also made better use of Bush’s primary asset, his family name.

In June 1982, George W. issued a prospectus, seeking $6 million in the initial public offering. But he managed to raise only $1.14 million. The shortfall was due in large part to the waning interest in the oil industry among investors. The price for a barrel of oil was falling and special tax breaks for losses incurred in oil investments had been slashed.

Within two years, it was clear that Bush Exploration was in trouble again. Michael Conaway, George W.’s chief financial officer, told the Washington Post, “We didn’t find much oil and gas. We weren’t raising any money.” Something had to be done.

In walked bailout number two in the persons of Cincinnati investors, William DeWitt Jr. and Mercer Reynolds III. Heading up an oil exploration company called Spectrum 7, DeWitt and Mercer contacted George W. about a merger with Bush Exploration. For Bush and his struggling company, the decision wasn’t hard to make.

In February 1984, George W. agreed to a merger with Spectrum 7 in which Dewitt and Reynolds would each control 20.1 percent and George W. would own 16.3 percent. George W. was named chairman and chief executive officer of Spectrum 7, which brought him an annual salary of $75,000.

Even though the merged companies still failed to make any money, the pieces were finally starting to fall into place for George W. Bush.

Spectrum 7 president Paul Rea remembers Bush’s name as a definite “drawing card” for investors. With oil prices collapsing in the mid-1980s, however, it became clear that George W.’s name alone would not save the company.

In a six-month period in 1986, Spectrum 7 lost $400,000 and owed more than $3 million with no hope of paying those debts off. Once more, the situation was growing desperate.

In September 1986, George W. was tossed his third lifeline, this time by Harken Energy Corporation, a medium-sized, diversified company that was purchased in 1983 by a New York lawyer, Alan Quasha.

Quasha seemed interested in acquiring not just an oil company, but a relationship with the son of the then-Vice President, George H.W. Bush. Harken agreed to acquire Spectrum 7 in a deal that handed over one share of publicly traded stock for five shares of Spectrum, which at the time were practically worthless.

After the acquisition in 1986, George W. got a seat on the Harken board of directors, landed a $120,000-a-year job as a consultant and received $600,000 worth of Harken stock options. By any account, this wasn’t a bad deal for an oilman who had never made any money in the oil business and, indeed, had lost lots of money for his investors.

A Political Bonus

But Harken found that its investment at least in George W. appreciated. Though the company had acquired the son of the Vice President, it ended up in 1989 with the son of the President. Harken moved to exploit that upgrade by expanding its operations into the Middle East, where business and family connections are of legendary importance.

In 1989, the government of Bahrain was in the middle of negotiations with Amoco for an agreement to drill for offshore oil. Negotiations were progressing until the Bahrainis suddenly changed direction.

Michael Ameen, who was serving as a State Department consultant assigned to brief Charles Hostler, the newly confirmed U.S. ambassador to Bahrain, put the Bahraini government in touch with Harken Energy.

In January 1990, in a decision that shocked oil-industry analysts, Bahrain granted exclusive oil drilling rights to Harken, a company that had never before drilled outside Texas, Louisiana and Oklahoma – and that had never before drilled offshore.

Nearly two years later, when The Wall Street Journal examined the curious Bahrain transaction, Bush declined to be interviewed but did agree to answer some questions in writing. Some of his responses were snippy, such as his answer to a question about whether his involvement in Dallas-based Harken lent it extra credibility in the Arab world.

“Ask the Bahranis,” Bush shot back.

Nevertheless, the January 1990 deal added to Harken’s stock value, with its shares rising more than 22 percent from $4.50 to $5.50. The run-up in Harken’s stock marked one of George W. Bush’s first successes in the oil business.

That limited success opened the door to Bush’s next step up the ladder, as a popular young owner of the Texas Rangers baseball team.

The beginning of that deal traced back to an idea of George W.’s Spectrum 7 partner, Bill DeWitt, whose father had owned the St. Louis Browns baseball team and later the Cincinnati Reds. DeWitt wanted to pull together a group of investors to buy the Texas Rangers.

To do so, DeWitt understood that he needed a native Texan in his group of investors. George W. fit the bill. The group of investors was missing only one thing – money. To address that need, George W. tapped a Yale fraternity brother, Roland Betts, who brought with him a partner from a film-investment firm, Tom Bernstein, both from New York.

The New York connection became a problem when Major League Baseball Commissioner Peter Ueberroth insisted on more financial backing from Texas-based investors. But Ueberroth was eager to put together a deal for the son of the President, so the commissioner brought in a second investment group headed by Richard Rainwater, who had built a $4 billion empire while working with the Bass family of Fort Worth.

Rainwater agreed to join Betts, Bernstein and George W. in the $86 million deal, but Rainwater imposed a strict limit on George W.’s active participation in the team.

Bush got to be called a “managing partner.” But – under Rainwater’s conditions – George W. would only be the handsome front man for the team; he would have no actual say in how it was run.

Selling Stock

To finance his part of the purchase price, Bush decided to sell two-thirds of his holdings in Harken. He pressed ahead with this decision though he knew that Harken was struggling financially and was planning to sell shares in two subsidiaries to avert bankruptcy.

Outside lawyers from the Haynes and Boone law firm advised Harken officers and directors on June 15, 1990, that if they possessed any negative information about the company’s outlook, a stock sale might be viewed as illegal trading. Bush, who had attended a meeting four days earlier on the plan to sell off the two subsidiaries, went ahead anyway.

On June 22, 1990, Bush sold 212,140 shares to a still-unidentified buyer who spared Bush the trouble of selling on the open market, which likely would have tanked Harken’s lightly traded stock and meant less money for Bush.

The sale also preceded Harken’s disclosure in August 1990 of more than $23 million in losses for the second quarter, which caused the stock to fall 20 percent before recovering for a time. To make matters worse, Bush missed deadlines by up to eight months for disclosing four stock sales to the Securities and Exchange Commission.

After the missed deadlines were noted in published reports in 1991, the SEC opened an insider-trading investigation. At the time, Bush’s father was President and the person responsible for appointing the SEC chairman.

George W. Bush denied any wrongdoing in the Harken stock sales. He insisted that he had sold into the “good news” of Harken landing offshore drilling rights in Bahrain. Bush’s lawyers also argued that he had cleared the stock sale with the Haynes and Boone lawyers, a claim that proved to be important in the SEC’s decision to close the investigation on August 21, 1991, without ever interviewing Bush.

But what the SEC didn’t know at the time was that the Haynes and Boone lawyers had sent Bush and other Harken officials that letter warning against selling shares if they knew about the company’s financial troubles. One day after the investigation was closed, Bush’s lawyer Robert W. Jordan delivered a copy of the warning letter to the SEC.

Asked years later about the letter, SEC investigators said they had no memory of reading it.

“The SEC investigation apparently never examined a key issue raised in the memo: whether Bush’s insider knowledge of a plan to rescue the company from financial collapse by spinning off two troubled units was a factor in his decision to sell,” the Boston Globe reported in October 2002, almost two years after Bush gained the presidency.

Bush also was less than forthcoming about why he missed the deadlines for reporting the June 1990 stock sale and three others. For years, he claimed publicly that he had sent the reports in on time and the SEC had lost them, a sort of the bureaucrats-ate-my-stock-sale-reports argument.

The issue resurfaced in 2002 after Enron and other major companies collapsed in accounting scandals. Bush was positioning himself as a friend of embattled shareholders and demanding that corporate officers reveal their stock sales almost immediately.

Asked why he had not lived up to his own admonition, Bush shifted the blame to Harken’s lawyers for the late filings. He then changed his story again to say that he simply didn’t know what had happened. He never apologized for claiming falsely for years that it had been the SEC’s fault.

Nevertheless, on June 22, 1990, Bush made $848,560 on his Harken stock sale. He used $606,000 of his profits to buy a 1.8 percent stake in the Texas Rangers baseball team. Then, after helping engineer public financing for a new baseball stadium in Arlington, Texas, he sold his interest in the Rangers for $14.9 million, more than 20 times his original investment.

The success of his Texas Rangers investment was even more dramatic when compared with what happened to the Harken stock that Bush sold for $4 a share to that unidentified buyer. A dozen years later, each of those shares would have been worth two cents.

George W.’s time with Harken and his part ownership of the Rangers made him a millionaire and a well-known personality in Texas. That measure of success had derived almost entirely from the family’s triangle of oil-political-financial connections, from Texas to Washington to Wall Street.

Though most of Bush’s sordid business history was known during Campaign 2000, it attracted little attention in the mainstream press, especially compared to the news media’s obsession with dissecting every comment by Al Gore for signs of exaggeration.

Even today, as George W. Bush’s crony capitalism, aversion to regulation, and his trillion-dollar war in Iraq have driven the U.S. – and the world’s – economy off the road and into financial quicksand, big-time journalists continue with their Bush deference. They won’t put too much blame on the person who arguably should top the list of those responsible.

While the Brokaws and Friedmans might justify their behavior as a resistance to “piling on” a lame-duck President, they also are contributing to a distorted history – one that fails to identify Bush and his political/media enablers as largely to blame for this global catastrophe.

By averting their eyes from Bush and focusing so much on Obama now, the mainstream U.S. news media also clears space for right-wing media voices like Rush Limbaugh to begin writing another false narrative, blaming the financial collapse on the incoming President not on the one who has held the office the past eight years.

That narrative, in turn, could restrict what an Obama administration can do once in office. That, in turn, could open the way for a possible Republican comeback in 2010, much as the GOP rebounded from Bill Clinton’s victory in 1992 to win both houses of Congress in 1994.

Though the U.S. press corps is loath to examine history, especially when it reflects badly on the Bush Family, the present – and the future – might hinge on the American people finally understanding how George W. Bush and his reverse-Midas touch managed to turn a relatively golden U.S. economy to dross in just eight years.

It was all predictable.

Who is James K Happ? Columbia Homecare Group! Richard Rainwater

Who is James K Happ, perhaps the most important criminal of all? If only reporters would follow the money with this ex-CFO of Columbia Homecare Group, Inc., NCFE and Med Diversified Inc. (Can you follow the money?)

In 1998, a time when no one wanted homecare companies, stated in SEC records, James K Happ assisted with the divestiture of the losing homecare group within HCA/TN Inc.: Columbia Homecare Group Inc. And who is related to that group? Richard Rainwater and Richard Scott. Who is Richard Rainwater? G W Bush's ex-partner)
Who financed this divestiture of Columbia Homecare Group, Inc.? NCFE, National Century Financial Enterprises Inc.

Sorce : http://bankrupt.com/TCR_Public/040922.mbx

"...After the sale transaction between HCA and Medshares,
Medshares continued to receive periodic interim payments
from Medicare under HCA's provider number..."

How was it a 'sale' if Medshares collected payments from HCA's provider number?

JPMorgan Chase, Citigroup, James K Happ, Columbia Homecare Group, Richard Rainwater, aka HCA

"Ponzi scheme that raised $60 million from investors across the country"


The push to credit 'mortgage-back securities' as the causal effect of our financial crisis is very troubling and misleading.

Yes,the home mortgage crisis is a huge contribution, however do you honestly believe Iceland, a Country, has gone bankrupt because of 'low income'or 'mortgage backed securitues'?
We cannot continue to allow the false rhetoric to soar and the truth to be buried. If we continue to blame 'mortgage-backed securites" as the root of the problem, justice will never be ceased.

We need to get to the root of this Global Financial Crisis, whatever the outcome.

Remember, Corporate Bankruptcy,Debtor in Possession Financing,(Darla Moore's invention-Richard Rainwater's wife), Healthcare Fraud and REIT's would be a great start.

I believe we should go back to 1997. The year Healthcare Reform was passed.

In 1997, the largest healthcare company in the nation was the "Frist Family" and friends' Hospital Corporation of America , HCA, or any one of their affiliates...There are many players here so try to keep up!

FOR IMMEDIATE RELEASE
THURSDAY, JUNE 26, 2003
WWW.USDOJ.GOV
LARGEST HEALTH CARE FRAUD CASE IN U.S. HISTORY SETTLED
HCA INVESTIGATION NETS RECORD TOTAL OF $1.7 BILLION

WASHINGTON, D.C. - HCA Inc. (formerly known as Columbia/HCA and HCA - The Healthcare Company) has agreed to pay the United States $631 million in civil penalties and damages arising from false claims the government alleged it submitted to Medicare and other federal health programs, the Justice Department announced today.

One must wonder about the mortgage-related securities JPMorgan is taking onto its books. The following are not the only questionable liabilities JPMorgan has taken on that Richard Rainwater was directly involved with and I am not referring to oil.

JPMorgan is taking on about $176 billion of WaMu home loans, and marking down almost $31 billion of that right off the bat.

Just before the Real Estate crash in 2007, JPMorgan Chase financed Richard Rainwater's REIT, Crescent (CEI) sale. (Many investors wondered about this move)

Jul 28, 2003
2003-87
SEC Settles Enforcement Proceedings against J.P. Morgan Chase and Citigroup
FOR IMMEDIATE RELEASE
J.P. Morgan Chase Agrees to Pay $135 Million to Settle SEC Allegations that It Helped Enron Commit Fraud
Citigroup Agrees to Pay $120 Million to Settle SEC Allegations that It Helped Enron and Dynegy Commit Fraud

The following is an excerpt from a 10-K SEC Filing, filed by J P MORGAN CHASE & CO on 3/9/2006: Enron litigation. JPMorgan Chase and certain of its officers and directors are involved in a number of lawsuits arising out of its banking relationships with Enron Corp.

The three current or former Firm employees are sued in their roles as former members of NCFE's board of directors
National Century Financial Enterprises litigation. JPMorgan Chase, JPMorgan Chase Bank, JPMorgan Partners, Beacon Group, LLC and three current or former Firm employees have been named as defendants in more than a dozen actions filed in or transferred to the United States District Court for the Southern District of Ohio (the "MDL Litigation"). In the majority of these actions, Bank One, Bank One, N.A., and Banc One Capital Markets, Inc. are also named as defendants.

JPMorgan Chase Bank and Bank One, N.A. are also defendants in an action brought by The Unencumbered Assets Trust ("UAT"), a trust created for the benefit of the creditors of National Century Financial Enterprises, Inc. ("NCFE") as a result of NCFE's Plan of Liquidation in bankruptcy.
"...the Order finds that JPMorgan Chase was a cause of NCFE's violations of Section 17(a)(3) of the Securities Act, requires JPMorgan Chase to cease and desist from committing or causing any violations and any future violations of Section 17(a)(3) of the Securities Act, and orders JPMorgan Chase to pay disgorgement of $1,286,808.82 and prejudgment interest of $711,335.76. JPMorgan Chase consented to the issuance of the Order without admitting or denying any of the findings therein."

JP Morgan Settles SEC Proceeding Relating to Activities as Trustee to National Century Financial Enterprises

The SEC settled administrative proceedings against JPMorgan Chase & Co relating to its activities as an asset-backed indenture trustee for certain special-purpose subsidiary programs (programs) of National Century Financial Enterprises, Inc. (NCFE), formerly a Dublin, Ohio healthcare financing company, during the approximate period 1999-2002. According to the SEC's Order, JPMorgan Chase and Bank One Corporation, which merged into JPMorgan Chase in 2004, at the instruction of NCFE, made transfers between reserve accounts in the programs that contradicted NCFE's representations to investors about how the reserve accounts would be used and contravened the requirements of the indentures governing the programs. In addition, the Order finds that pursuant to NCFE's instructions, JPMorgan Chase and Bank One made month-end transfers of huge amounts of reserve account funds and that these transfers helped NCFE mask substantial and growing reserve account shortfalls. Based on the above, the Order finds that JPMorgan Chase was a cause of NCFE's violations of Section 17(a)(3) of the Securities Act, requires JPMorgan Chase to cease and desist from committing or causing any violations and any future violations of Section 17(a)(3) of the Securities Act, and orders JPMorgan Chase to pay disgorgement of $1,286,808.82 and prejudgment interest of $711,335.76. JPMorgan Chase consented to the issuance of the Order without admitting or denying any of the findings therein. In the Matter of JPMorgan Chase & Co.

The Asset-Backed Securities Danger
NCFE was basically a financial "factor," advancing cash to hospitals, physicians, and other health-care facilities in exchange for their receivables—the delayed payments made by insurance companies and government agencies for patients' treatment. NCFE would place these receivables into pools, then issue derivative securities—known as asset-backed securities—backed by the expected insurance payments



All of the Debtors' outstanding bonds at this time consist of:
Amount Issuer Indenture Trustee
------ ------ -----------------
$924,995,000 NPF VI, Inc. JP Morgan Chase & Co.

$2,047,500,000 NPF XII, Inc. Bank One, N.A.

In papers filed with the Bankruptcy Court this week, the Company reports that, as of September 30, 2002, its books and records reflected approximately $3.8 billion in assets and approximately $3.6 billion in liabilities.



An Investor Report dated October 23, 2002, and delivered to Bank One reports that:

(a) NCFE held $851,993 in a Seller Credit Reserve Account as
of October 1, 2002, when there was supposed to be around
$145 million in that account on Oct. 1;

(b) NCFE held $498,321 in an Offset Reserve Account on
Oct. 1, when $44 million should have been on deposit; and

A little history of National Century Financial Enterprises (NCFE):
Prior to bankruptcy, NCFE provided financing to various healthcare providers through wholly-owned special-purpose vehicles,including NPF VI and NPF XII, which purchased discounted accounts receivable to be paid under third-party insurance programs. NPF VI and NPF XII financed the purchases of such receivables, primarily through private placements of notes.

National Century defendants to be sentenced in July
Monday, June 30, 2008 9:03 AM
By Jodi Andes

THE COLUMBUS DISPATCH
Five National Century defendants will soon find out the price they will pay for their roles in the nation's largest case of private-sector fraud.

And all this came from Lance Poulsen? He stated "These experiences prepared me well to begin my own insurance business in Columbus in 1986 called the Poulsen Group. And, as a result of that venture, NCFE became a reality in 1991."

TUESDAY, 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

COLUMBUS – A federal grand jury here today returned a 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 until it filed for bankruptcy in November, 2002.
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.

"All defendants, except for Happ..."
Who is James K Happ?

James K Happ has an interesting employment history.

SEPTEMBER 9, 2003
Source: ANNUAL MEETING OF STOCKHOLDERS-SEPTEMBER 9, 2003-Med Diversified Inc.
JAMES K. HAPP has served as chief executive officer of our subsidiary,
Tender Loving Care Health Care Services, Inc., since October 2002.
Previously, Mr. Happ served for three years as executive vice president of NCFE,
during which time he restructured the servicer department to improve operational
Performance and accelerated the utilization of technology to increase operational
efficiency. Mr. Happ also served 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.

In this role, he directed the company through the challenging reimbursement climate, known as the interim payment system, and participated in the divestiture of all of Columbia/HCA's home care operations. (All of which are in the Bankruptcy case in Tennessee) Who owned Columbia Homecare Group, Inc.?

What about the missing executive who has yet to go on trial? James K Happ , the ex-CFO of Columbia Homecare Group?

Lance Poulsen of National Century Financial Enterprises convicted
A federal jury finds the former chief executive guilty of defrauding investors of $2.9 billion before his healthcare financing company collapsed in 2002.
November 1, 2008


Lance Poulsen, former chief executive of National Century Financial Enterprises Inc., was convicted Friday of defrauding investors of $2.9 billion before his healthcare financing company collapsed in 2002.

A federal jury in Columbus, Ohio, found Poulsen guilty of fraud, conspiracy and money laundering. Poulsen, 65, cheated investors who bought National Century bonds to back the purchase of unpaid insurance bills from medical providers that needed cash, prosecutors said. The company advanced $2.2 billion to six companies in which Poulsen owned stakes, they said.
National Century's collapse hastened the bankruptcies of 275 hospitals and other healthcare providers, authorities say. The victims included Pacific Investment Management Co., the world's largest bond fund manager. Newport Beach-based Pimco lost $283 million and Credit Suisse Group lost $257 million, prosecutors said.

Poulsen, who founded the Ohio firm, faces 30 years to life in prison. He already is serving 10 years after being convicted in March of trying to bribe the main witness against him. Six National Century executives have been convicted, as well as four who pleaded guilty.

"...illegally funding some firms ..." Which firms were illegally funded?

Which firms were illegally funded without buying eligible accounts receivable. That resulted in more than $1 billion? Which firms were these? Look at James K Happ! The last indicted executive?

Now this is the big news in this testimony:

'Terpening said it was because National Century couldn’t get a clean audit that it collapsed. Gibson answered that National Century fell apart because it had been illegally funding some firms without buying eligible accounts receivable. That resulted in more than $1 billion that couldn’t be accounted for, which is why Deloitte would not give the firm a clean audit, Gibson said. When that happened, she said, National Century went under because it couldn’t raise money from new investors to pay off old investors.

Terpening also asked Gibson about bank trustees who oversaw lock boxes National Century used to collect accounts receivable. After getting Gibson to admit that the trustees were a watchdog of sorts, he asked Gibson if those trustees had a responsibility to double check reports National Century sent to them.'

After telling jurors about her central role in an alleged $2.84 billion fraud and Lance Poulsen’s attempt at bribery in 2007, Sherry Gibson faced questions Tuesday from a defense attorney determined to pick her story apart.

Gibson, the former executive vice president of compliance at National Century Financial Enterprises Inc., sparred with William Terpening over her knowledge of the firm’s governing documents and Poulsen’s intentions when he contacted her through an intermediary in 2007.

Poulsen is the cofounder and former CEO of Dublin-based National Century, a health-care financing firm that collapsed into bankruptcy in 2002. He is standing trial in U.S. District Court in Columbus on charges he ran a fraud that resulted in billions of investor dollars going missing. He is accused of one count each of conspiracy, wire fraud and money laundering conspiracy, four counts of concealment of money laundering and six counts of securities fraud. He has pleaded not guilty to all the charges.

Earlier in the trial, Gibson told jurors that Poulsen had directed her to alter the company’s books and create fraudulent investor reports so National Century could hide the more than $1 billion in advances it had given to companies owned by Poulsen and others without collateral.

But on Tuesday, Terpening did his best to sow doubt in the minds of jurors. In one exchange, Terpening suggested that because Gibson hadn’t read all of National Century’s governing documents, she didn’t know for sure that the advances the company made were illegal. National Century purchased health-care providers’ accounts receivable in exchange for quick cash, then securitized the debt into AAA-rated bonds for investors.

In another exchange, Terpening attempted to pin the blame for National Century’s collapse on auditors who would not give the company a clean report. National Century needed clean audits on an annual basis from accounting firm Deloitte & Touche LLP if it wanted to issue new bonds. In 2002, however, Gibson said Deloitte would not give National Century a clean bill of health, which resulted in the firm’s unwinding.

Terpening said it was because National Century couldn’t get a clean audit that it collapsed. Gibson answered that National Century fell apart because it had been illegally funding some firms without buying eligible accounts receivable. That resulted in more than $1 billion that couldn’t be accounted for, which is why Deloitte would not give the firm a clean audit, Gibson said. When that happened, she said, National Century went under because it couldn’t raise money from new investors to pay off old investors.

Terpening also asked Gibson about bank trustees who oversaw lock boxes National Century used to collect accounts receivable. After getting Gibson to admit that the trustees were a watchdog of sorts, he asked Gibson if those trustees had a responsibility to double check reports National Century sent to them.Earlier in the day, Terpening also attacked Gibson on her contention that Poulsen attempted to bribe her into changing her testimony in the summer of 2007. Typical of the back-and-forth was this:

“It was very easy for you to act naturally while you were lying?” Terpening asked.

“No it was very hard,” Gibson said.

Or this:

“This was sort of joint effort ... to trap Mr. Poulsen, is that right?” Terpening asked.

“No,” Gibson answered.

Under earlier questioning from the government, Gibson told jurors that Poulsen used a mutual friend, Karl Demmler, as an intermediary. Demmler asked Gibson to have “amnesia” about allegedly fraudulent activity that took place at National Century in exchange for $1 million.

After Demmler extended the bribery offer, Gibson decided to work with the government to secretly record the bribery conversations in an effort to convict Poulsen and Demmler.

On cross examination, Terpening focused on the fact that Gibson never spoke with Poulsen or received any money from him.

“As I’ve previously stated, I never spoke with Mr. Poulsen directly,” Gibson said.

Thanks to testimony and cooperation from Gibson, Poulsen and Demmler were convicted in March by a separate jury of attempting to bribe Gibson.

The fraud trial continues Wednesday with the government expected to call its last witness, then rest its case.

"...who the true owners of National Century were..."

"...National Century was a financier of last resort for health-care providers ..."
This is not the only function this FINANCE Company was involved with.
Is the government disclosing all of the FACTS?

"...an attorney for Lance Poulsen sparred with a government witness Wednesday over who the true owners of National Century were..."
This is very telling....REPORTERS....PAY ATTENTION!!!!

Wednesday, October 8, 2008 - 5:30 PM EDT
Poulsen’s attorney questions FBI's National Century probeBusiness First of Columbus - by Kevin Kemper
Attempting to show the government’s investigation of National Century Financial Enterprises Inc. was incomplete, an attorney for Lance Poulsen sparred with a government witness Wednesday over who the true owners of National Century were.

John Haller, Poulsen’s attorney, confronted an FBI agent who earlier told a jury that Poulsen was a primary owner of Dublin-based National Century.

Poulsen, National Century’s former president and CEO, is standing trial in U.S. District Court in Columbus on charges of conspiracy, securities fraud and wire fraud, among others.

The government has accused Poulsen of running a fraud at National Century that resulted in $2.84 billion in investor funds going missing after the company collapsed into bankruptcy in 2002.

Poulsen has pleaded not guilty to all charges.

Jeffrey Williams, an FBI agent specializing in white-collar crime, told a jury Tuesday and Wednesday about his analysis of National Century documents in which he found the company illegally advanced millions of dollars to companies owned by Poulsen and other executives at the firm during National Century’s last four years.

On Wednesday afternoon, Haller attempted to pick apart Williams’ analysis and methods.

“Your goal was to make Mr. Poulsen look as bad as possible, wasn’t it?” Haller asked.

“No,” Williams said.

“You wanted to look for improper transactions only, right?” Haller asked.

“No,” Williams said.

Haller took Williams and the jury through documents that showed seven different owners of National Century, five of which were holding companies.

Williams told Haller that he had not been aware of all the companies with ownership, but noted that some of those holding companies were owned by Poulsen and others.

Under questioning by U.S. Department of Justice Trial Attorney Leo Wise, Williams read from transcript statements made by Poulsen during his August sentencing hearing on witness tampering charges

“There is no question that NCFE was my company. No question your honor,” Poulsen is quoted as saying.

Marbley sentenced Poulsen to 10 years imprisonment on Aug. 8 after a separate jury found Poulsen guilty in March of attempting to bribe a government witness.

Haller and Williams also sparred over a transaction Williams disclosed to the jury earlier in the day. That transaction, Williams said, showed that National Century had diverted investor funds to pay for a lawsuit settlement.

National Century was a financier of last resort for health-care providers such as hospitals and urgent care centers. It purchased accounts receivable from the providers at a discount in exchange for quick cash the providers could use to pay bills. National Century then packaged the receivables as bonds which it sold to investors.

The government has alleged the investor funds were only allowed to be used to purchase accounts receivable. Defense attorneys, however, contend the government is simply misinterpreting National Century’s governing documents.

Background of the Banks’ Role in the Enron Debacle

Although three banks (and others) have settled with the victims for $7.2 billion, several huge banks still named in this suit have not paid a penny to the victims of the fraud.

As the Court’s dissenting Judge summarized, the ruling “immunizes a broad array of undeniably fraudulent conduct from civil liability . . . effectively giving secondary actors license to scheme with impunity, as long as they keep quiet.”

"...testified that many of the banks’ transactions were contrived, deceptive deals done solely to create the false appearance of profits and cash flow. "

Merrill Lynch purchased Nigerian barges from Enron on the last day of 1999 only because Enron secretly promised to buy the barges back within six months, guaranteeing Merrill Lynch a profit of more than 20%. As a result of this fraud, Merrill Lynch ultimately paid $80 million to settle with the SEC.

Where did that $80million go?

Barclays entered into several sham transactions with Enron,

Credit Suisse First Boston engaged in “pre-pay” transactions with Enron

Background on the Enron Victims' Lawsuit to Recover Damages from Wall Street Banks that Orchestrated the Enron Fraud

Background of the Banks’ Role in the Enron Debacle


As a result of the massive fraud at Enron, shareholders lost tens of billions of dollars. Many Enron executives, Enron’s accounting firm and certain bank officials were indicted.

Andrew Fastow, Enron’s now-imprisoned former finance chief, testified that many of the banks’ transactions were contrived, deceptive deals done solely to create the false appearance of profits and cash flow. Internal Enron documents and testimony of bank employees detailed how the banks engineered sham transactions to keep billions of dollars of debt off Enron’s balance sheet and create the illusion of increasing earnings and operating cash flow. For example:

Merrill Lynch purchased Nigerian barges from Enron on the last day of 1999 only because Enron secretly promised to buy the barges back within six months, guaranteeing Merrill Lynch a profit of more than 20%. As a result of this fraud, Merrill Lynch ultimately paid $80 million to settle with the SEC.

Barclays entered into several sham transactions with Enron, including creating a “special purpose entity” called Colonnade, a shell company to hide Enron’s debt, named after the street in London where the bank is headquartered.

Credit Suisse First Boston engaged in “pre-pay” transactions with Enron, including serving as one of the stop-offs for a series of round-trip, risk-free commodities deals in which commodities were never actually transferred or delivered.

Although three banks (and others) have settled with the victims for $7.2 billion, several huge banks still named in this suit have not paid a penny to the victims of the fraud.
The Fifth Circuit’s Decision


After years of preparation and just a few weeks before trial, the Fifth Circuit Court of Appeals vacated the class certification order.

Although the 2-to-1 decision of the Fifth Circuit acknowledged that the banks’ conduct was “hardly praiseworthy,” it ruled that because the banks themselves did not make any false “statements” about their conduct, they could not be liable to the victims even if they knowingly participated in the scheme to defraud Enron’s shareholders.

As the Court’s dissenting Judge summarized, the ruling “immunizes a broad array of undeniably fraudulent conduct from civil liability . . . effectively giving secondary actors license to scheme with impunity, as long as they keep quiet.” In an extraordinary admission, the Court’s two-member majority acknowledged that their ruling runs afoul of “justice and fair play” (“We recognize, however, that our ruling . . . may not coincide, particularly in the minds of aggrieved former Enron shareholders who have lost billions of dollars in a fraud they allege was aided and abetted by the defendants at bar, with notions of justice and fair play.”)

For more background on the Enron lawsuit: www.universityofcalifornia.edu/news/enro

GW BUSH Strikes again!

Home Ownership-

As Larry Elder notes, since Bush has taken office, home ownership is way up for blacks:

Half of all minority households are homeowners, an all-time high. In 2002, Bush vowed to increase minority homeownership by 5.5 million families by 2010. Bush pushed for programs on down payment assistance, and called for increased funding for housing counseling services.
While some worry themselves half to death about the impending burst of the housing bubble, others celebrate that so many Americans-- of all races-- now own their own homes. When a family owns a home, they are far more likely to act to increase the value of their home, as well as their community. This means more volunteering, more upkeep on the house itself, and more concern for neighbors. Home owners typically have a much greater stake in their communities than renters, taking more interest in the quality of schools, and contributing more to community initiatives.

Owning a home can transform a family, but it can also transform communities. George W. Bush has made minority home ownership a priority of his administration, and his efforts are paying off nicely.

Pickens heaps praise on his allies and scorn on those who stood in his way, offering comeuppance to Rainwater and his wife Darla Moore, who engineered

By Chris Baltimore

HOUSTON (Reuters) - You've seen T. Boone Pickens on "Larry King Live," watched his commercials exalting the "Pickens Plan" to build windmills and listened to him warn of a looming energy crisis.

Now the Texas oil tycoon shares hints at how you can attain a modest measure of his success -- which includes a 68,000-acre ranch teeming with quail and deer and a Gulfstream 550 jet -- and head off an energy crisis while you're at it.

In his new book, "The First Billion Is the Hardest" (Crown Business, $26.95), the "Oracle of Oil" tells how he learned the basics of capitalism as a paperboy, founded an oil company, and eventually struck pay-dirt as an energy hedge fund manager.

It's a Horatio Alger story with deep roots in the American rags-to-riches theme, written with a late-career Baby Boomer in mind. His message to the aging careerist: It's never too late to recreate yourself and find resurgence.

"Wake up every morning believing you're going to live forever," the 80-year-old former corporate raider writes. "No limits. No restrictions." The "T" is for Thomas but his friends call him "Pick."

The straight-talking Texan offers up his career as testament to the regenerative powers of the U.S. capitalist system.

After building Mesa Petroleum into the largest independent U.S. oil company from a $2,500 investment, Pickens was nudged out of the chief executive's chair by powerful financiers like Richard Rainwater.

At age 69 Pickens found himself embroiled in a bitter divorce proceeding while trying to run a money-losing energy fund and suffering from undiagnosed depression. But Pickens gritted his teeth, focused on getting in shape, and eventually maneuvered his energy fund, BP Capital to take advantage of the biggest one-year run-up of natural gas prices in history. From 2000 to 2007 the fund made a total profit of $8 billion.

"Things will get better if you hang in there and believe in yourself," Pickens writes.

Pickens heaps praise on his allies and scorn on those who stood in his way, offering comeuppance to Rainwater and his wife Darla Moore, who engineered Pickens' exit from Mesa. Pickens Moore as a "wolverine" who came between Pickens and Rainwater.

There's a chapter devoted to management theory, interspersed with declaratives like "DON'T MANAGE, LEAD." Another chapter lays out Pickens' treatise on how to make America energy independent by building windmills and powering cars with electricity and natural gas, not gasoline.

And there's a long-winded chapter devoted to his college alma mater -- Oklahoma State University.

On one of the bigger energy topics of the day, he disputes the idea that Saudi Arabia -- the world's top oil exporter -- can boost output at the drop of a hat.

"The Saudis say they've got 260 billion barrels," Pickens writes. "I don't believe them."

(Reporting by Chris Baltimore; Editing by Eddie Evans)

J.P. Morgan Chase and Citigroup engaged in, and indeed helped their clients design, complex...allowed Enron to hide the true extent of its borrowings

SEC Settles Enforcement Proceedings against J.P. Morgan Chase and Citigroup
FOR IMMEDIATE RELEASE
2003-87
J.P. Morgan Chase Agrees to Pay $135 Million to Settle SEC Allegations that It Helped Enron Commit Fraud

Citigroup Agrees to Pay $120 Million to Settle SEC Allegations that It Helped Enron and Dynegy Commit Fraud
Washington, D.C., July 28, 2003 -- The Securities and Exchange Commission today instituted and settled enforcement proceedings against two major financial institutions, J.P. Morgan Chase & Co. and Citigroup, Inc., for their roles in Enron Corp.'s manipulation of its financial statements. Each institution helped Enron mislead its investors by characterizing what were essentially loan proceeds as cash from operating activities. The proceeding against Citigroup also resolves the Commission's charges stemming from the assistance Citigroup provided Dynegy Inc. in manipulating that company's financial statements through similar conduct.

As to J.P. Morgan Chase, the Commission filed a civil injunctive action in U.S. District Court in Texas. Without admitting or denying the Commission's allegations, J.P. Morgan Chase consented to the entry of a final judgment in that action that would (i) permanently enjoin J.P. Morgan Chase from violating the antifraud provisions of the federal securities laws, and (ii) order J.P. Morgan Chase to pay $135 million as disgorgement, penalty, and interest.

As to Citigroup, the Commission instituted an administrative proceeding and issued an order making findings and imposing sanctions. Without admitting or denying the Commission's findings, Citigroup consented to the issuance of the Commission's Order whereby Citigroup (i) was ordered to cease and desist from committing or causing any violation of the antifraud provisions of the federal securities laws, and (ii) agreed to pay $120 million as disgorgement, interest, and penalty. Of that amount, $101 million pertains to Citigroup's Enron-related conduct and $19 million pertains to the Dynegy conduct.

The Commission intends to direct the money paid by J.P. Morgan Chase and Citigroup to fraud victims ($236 million to Enron fraud victims and $19 million to Dynegy fraud victims) pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002.

"These two cases serve as yet another reminder that you can't turn a blind eye to the consequences of your actions — if you know or have reason to know that you are helping a company mislead its investors, you are in violation of the federal securities laws," said Stephen M. Cutler, Director of SEC's Enforcement Division. His deputy, Linda Chatman Thomsen, added: "As today's actions illustrate, we intend to continue to hold counter-parties responsible for helping companies manipulate their reported results. Financial institutions in particular should know better than to enter into structured transactions where the structure is determined solely by accounting and reporting wishes of a public company."

J.P. Morgan Chase and Citigroup engaged in, and indeed helped their clients design, complex structured finance transactions. The structural complexity of these transactions had no business purpose aside from masking the fact that, in substance, they were loans. As alleged in the charging documents, by engaging in certain structural contortions, these financial institutions helped their clients: (1) inflate reported cash flow from operating activities; (2) underreport cash flow from financing activities; and (3) underreport debt. As a result, Enron and Dynegy presented false and misleading pictures of their financial health and results of operations. Significantly, with respect to Enron, both financial institutions knew that Enron engaged in these transactions specifically to allay investor, analyst, and rating agency concerns about its cash flow from operating activities and outstanding debt. Citigroup knew that Dynegy had similar motives for its structured finance transaction.

As alleged by the Commission, these institutions knew that Enron engaged in the structured finance transactions that are the subject of today's Commission actions to match its so-called mark-to-market earnings (paper earnings based on changes in the market value of certain assets held by Enron) with cash flow from operating activities. As alleged, by matching mark-to-market earnings with cash flow from operating activities, Enron sought to convince analysts and credit rating agencies that its reported mark-to-market earnings were real, i.e., that the value of the underlying assets would ultimately be converted into cash.

The Commission further alleges that these institutions also knew that these structured finance transactions yielded another substantial benefit to Enron: they allowed Enron to hide the true extent of its borrowings from investors and rating agencies because sums borrowed in these structured finance transactions did not appear as "debt" on Enron's balance sheet. Instead they appeared as "price risk management liabilities," "minority interest," or otherwise. In addition, Enron's obligation to repay those sums was not otherwise disclosed.

Specifically as to J.P. Morgan Chase, the Commission's allegations stem from J.P. Morgan Chase's participation in so-called prepay transactions with Enron which were loans disguised as commodity trades to achieve Enron's reporting and accounting objectives. These prepays were in substance loans because their structure eliminated all commodity price risk that would normally exist in commodity trades. This was accomplished through a series of trades whereby Enron passed the commodity price risk to a J.P. Morgan Chase-sponsored special purpose vehicle, which passed the risk to J.P. Morgan Chase, which, in turn, passed the risk back to Enron. While each step of this structure appeared to be a commodity trade, with all elements of the structure taken together, Enron received cash upfront and agreed to future repayment of that cash with negotiated interest. The interest amount was set at the time of the contract, was calculated with reference to LIBOR, and was independent of any changes in the price of the underlying commodity. The only risk in the transactions was J.P. Morgan Chase's risk that Enron would not make its payments when due, i.e., credit risk.

The Commission's action with respect to Citigroup also stems from certain prepay transactions with Enron that, while structured somewhat differently than the Chase transactions, had the same overall purpose and effect. Like the J.P. Morgan Chase prepays, the Citigroup prepays passed the commodity price risk from Enron to a Citigroup-sponsored special purpose vehicle to Citigroup and back to Enron. As in the J.P. Morgan Chase prepays, Enron's future obligations under the Citigroup prepays consisted of repayments of principal and interest that were independent of any changes in the price of the underlying commodity.

Additionally, the Commission's action against Citigroup is based on two other transactions with Enron, Project Nahanni and Project Bacchus, each of which was also a structure that transformed cash from financing into cash from operations. As the Commission found, in project Nahanni, Citigroup knowingly helped Enron structure a transaction, that allowed Enron to generate cash from operating activities by selling Treasury bills bought with the proceeds of a loan. Project Bacchus was structured by Enron as a sale of an interest in certain of its pulp and paper businesses to a special purpose entity capitalized by Citigroup with a $194 million loan and $6 million in equity. According to the Commission, however, in substance, Project Bacchus was a $200 million financing from Citigroup, because Citigroup was not at risk for its equity investment in the project.

The Citigroup action also contains findings relating to a transaction with Dynegy — Project Alpha — which was a complex financing that Dynegy used to borrow $300 million. According to the Commission's findings, Citigroup knew that Dynegy implemented Alpha to address the mismatch between its mark-to-market earnings and operating cash flow, and that it characterized as cash from operations what was essentially a loan transaction. As Citigroup knew, Dynegy, too, was concerned that the mismatch between earnings and cash flow from operations would raise questions about the quality of Dynegy's earnings and its ability to sustain those earnings.

In determining to settle its action against Citigroup, the Commission took into account Citigroup's cooperation with the Commission's investigation, as well as its timely efforts to resolve the matter.

The Commission brought its Enron-related actions in coordination with the New York County District Attorney's Office, which, also today, entered into settlement agreements with J.P. Morgan Chase and Citigroup.

The Commission also acknowledges the assistance of the Federal Reserve Bank of New York, the Office of the Comptroller of the Currency, and the New York State Banking Department in connection with today's Enron-related actions. Today, the Federal Reserve Bank of New York and the Office of the Comptroller of the Currency entered into separate written agreements with Citigroup. The Federal Reserve Bank of New York and the New York State Banking Department entered into a written agreement with J.P. Morgan Chase. These agreements, between the institutions and their primary banking regulators, obligate them to enhance their risk management programs and internal controls so as to reduce the risk of similar misconduct.

With these two actions, the Securities and Exchange Commission has raised to six the total number of separate actions it has brought in connection with the Enron matter in the twenty months since Enron declared bankruptcy. The various defendants and respondents include three major financial institutions, Enron's former Chief Financial Officer, and eight other former senior Enron executives. The commission has so far garnered $324 million for the benefit of the victims of the Enron fraud.

The Commission's investigations relating to Enron and Dynegy are continuing.

For further information contact:

Linda Chatman Thomsen, Deputy Director, Division of Enforcement — (202) 942-4501
Harold F. Degenhardt, District Administrator, Fort Worth District Office — (817) 978-6469
Charles J. Clark, Assistant Director, Division of Enforcement — (202) 942-4731
Additional Materials Available at www.sec.gov

Securities Exchange Commission....blame JP Morgan Chase.

Fraud trial delayed for National Century founder
Monday, July 14, 2008 3:29 PM
By Jodi Andes

THE COLUMBUS DISPATCH

File
Lance K. PoulsenNational Century Financial Enterprises founder Lance K. Poulsen has won a two-month delay for his trial on fraud charges.

Poulsen had been scheduled to go to trial Aug. 4 in U.S. District Court in Columbus on charges that stem from the company’s collapse in November 2002. Investors lost nearly $2 billion in what prosecutors say is the nation’s largest private-sector fraud case.

Today, federal Judge Algenon L. Marbley agreed to delay the trial until Oct. 1 so Poulsen’s attorneys can review federal documents they recently received.

Defense attorneys requested documents used as part of a March ruling by the Securities Exchange Commission that placed partial blame for the company’s collapse on JP Morgan Chase.

Chase Bank and Bank One, which later merged into JP Morgan Chase, served as trustee banks for National Century’s programs.

Marbley gave Poulsen the Oct. 1 trial date of National Century executive James K. Happ. His trial, also on fraud charges, is now scheduled to start on Dec. 1.

National Century was a Dublin-based company that, for a fee, collected accounts receivable for health-care providers. National Century used investors’ money to give cash to health-care providers so they could pay their bills.

When National Century collapsed, more than 275 health-care providers went bankrupt.

jandes@dispatch.com

'Nation’s largest case of private-sector fraud'......

Then why isn't anyone paying attention?


National Century defendants to be sentenced in July
Monday, June 30, 2008 9:03 AM
By Jodi Andes

THE COLUMBUS DISPATCH
Five National Century defendants will soon find out the price they will pay for their roles in the nation’s largest case of private-sector fraud.

Federal Judge Algenon L. Marbley has set sentencing dates for four defendants convicted in March and a fifth who previously pleaded guilty.

All were convicted in connection with crimes that led to the collapse of National Century Financial Enterprises.

The Dublin-based company – which bought accounts receivable from health-care providers, collected those debts and kept a percentage in return – went into bankruptcy with investors losing $1.9 billion.

The sentencing dates in U.S. District Court in Columbus are:

Donald H. Ayers, 72, 9 a.m. July 21.

Randolph H. Speer, 57, 1:30 p.m. July 21.

Roger S. Faulkenberry, 47, 9 a.m. July 22.

James E. Dierker Jr., 40, 1:30 p.m. July 22.

Jon A. Beacham, 41, 9 a.m. July 23.

Rebecca S. Parrett, 59, who disappeared while awaiting sentencing, remains on the lam.

Lance K. Poulsen, 65, National Century’s former president, is set for trial on Aug. 4.

Chairman: James K. (Jim) Happ ....The last man standing, hmmm.....

Why is James Happ the last man standing on trial ?
OCTOBER 2008

Tender Loving Care Health Care Services, Inc. Company Profile


A little TLC goes a long way. Tender Loving Care Health Care Services provides home health care services and staff from nearly 70 offices in about 20 states. The company offers disease management, cardiac care, pulmonary and wound management, infusion therapy, respiratory therapy, hospice support, and patient and family counseling. Tender Loving Care Health Care Services also provides continuing education programs (disease management and specialized patient care) for nurses through its Tender Loving Care Staff Builders program. Crescent Capital Investments bought the company out of bankruptcy in 2005.


Contact Information
Address: 1983 Marcus Ave.
Lake Success, NY 11042
Phone: 516-358-1000
Fax: 516-358-2465


Financial Highlights
Fiscal Year End: February
Revenue (2007): 112.60 M
Employees (2007): 4,600


Key People
• Chairman: James K. (Jim) Happ
• President and CEO: Wesley (Wes) Perry
• SVP and CFO: Willard Derr


Industry Information
Sector: Healthcare
Industry: Home Health Care


Top Competitors
• Apria Healthcare Group Inc. (ahg)
• Coram, Inc.
• Gentiva Health Services, Inc. (gtiv)



Need more? Get additional in-depth company and industry information from Hoover's Online.







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Questions or Comments?

Stephen J. Dresnick, MD, Sterling Healthcare Group

Hmmm......lets take a closer look at STERLING!!


Stephen J. Dresnick, MD '75 was founder, president, and chief executive officer of Sterling Healthcare Group. Under his leadership, Sterling Healthcare was distinguished several times as a leading Florida company by Florida Trend, Business Week, and The Miami Herald. His medical career includes being academic chairman and founding director of the Emergency Residency Program at Orlando Regional Medical Center. He is currently president of Symbiont Partners, a private equity investment firm. Dresnick continues to serve as a professor of emergency medicine at the University of North Carolina, Chapel Hill and is on the Board of Trustees for Florida International University.

Wonder what McCain thinks of this INVESTMENT?

Prescott Arizona.......

The Prescott City Council voted to join a lawsuit to try to recover the $1 million it lost after the bankruptcy of the National Financial Century Enterprises (NFCE), an Ohio corporation in which various public agencies have pooled investments.

America’s Most Wanted’

Local fugitive makes ‘America’s Most Wanted’

Rebecca Parrett, a former Dublin executive, has the distinct honor of making it on the television show “America’s Most Wanted” fugitive list. Pratt was convicted in March of securities fraud after the collapse of the National Century Financial Enterprises. Officials say she may be hiding in Arizona, and that there is a reward for information that leads to her arrest.

Hmm.......Who else is scheduled for trial in October?

Lance Poulsen wants his August trial on charges accusing him of bilking investors of $1.9 billion moved to October....

Hmm.......Who else is scheduled for trial in October?
COLUMBUS, Ohio (Map, News) - A former health care financing company executive wants his corporate fraud trial delayed two months, saying he's having trouble preparing his case.

Lance Poulsen wants his August trial on charges accusing him of bilking investors of $1.9 billion moved to October to give him and his attorneys more time to get ready.

Poulsen's attorneys say in a federal court filing in Columbus that they have millions of documents to review and are worried about evidence the government may not have produced yet.

They also say it's difficult to meet with Poulsen, who's housed in a southern Ohio jail a 12-hour drive from their offices in North Carolina.

The attorneys say they are a small law firm without the resources of a major national company.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

"This case is one of the largest corporate fraud investigations involving a privately held company headquartered in small town America,"

Former National Century Financial Enterprises Executives Found Guilty on All Charges in $3 Billion Securities Fraud Scheme
03.13.08, 7:09 PM ET
Defendants Guilty of Conspiracy, Fraud and Money Laundering



WASHINGTON, March 13 /PRNewswire-USNewswire/ -- A federal jury has found five former executives of National Century Financial Enterprises (NCFE) guilty of conspiracy, fraud and money laundering, following a six-week trial and less than two days of deliberation, Assistant Attorney General Alice S. Fisher and U.S. Attorney Gregory G. Lockhart of the Southern District of Ohio announced today. The Columbus, Ohio, jury returned the guilty verdict on all charges contained in a 27-count superseding indictment stemming from a scheme to deceive investors about the financial health of NCFE. The company, which was based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.



Donald H. Ayers, 71, of Fort Meyers, Fla., an NCFE vice chairman, chief operating officer, director and an owner of the company, was found guilty on charges of conspiracy, securities fraud and money laundering.



Rebecca S. Parrett, 59, of Carefree, Ariz., an NCFE vice chairman, secretary, treasurer, director and an owner of the company, was found guilty on charges of conspiracy, securities fraud, wire fraud and money laundering.



Randolph H. Speer, 58, of Peachtree City, Ga., NCFE's chief financial officer, was found guilty on charges of conspiracy, securities fraud, wire fraud and money laundering.



Roger S. Faulkenberry, 46, of Dublin, Ohio, a senior executive responsible for raising money from investors, was found guilty on charges of conspiracy, securities fraud, wire fraud and money laundering.



James E. Dierker, 40, of Powell, Ohio, associate director of marketing and vice president of client development, was found guilty on charges of conspiracy and money laundering.



"These convictions send a clear message to corporate America that executives will be brought to justice for lying to investors and misrepresenting the actions taken in their normal course of business," said Deputy Attorney General Mark Filip, chairman of the President's Corporate Fraud Task Force. "These are the latest successes in our efforts to improve the integrity of our financial markets."



"By holding accountable those who break the law, today's convictions help restore some of the faith and trust the public loses every time corporate executives defraud their investors. The jury's verdict demonstrates that the public will not stand by while company executives commit billion dollar frauds, leaving the honest investors to bear the losses they create," said Assistant Attorney General Alice S. Fisher. "I would like to thank the trial attorneys from the Fraud Section and the U.S. Attorney's Office as well as the FBI, IRS, Immigration and Customs Enforcement and U.S. Postal Inspection Service for their diligent and successful work on this case."



"The jury convicted company executives of building a financial house of cards and deceiving investors using financial sleight of hand," said Gregory G. Lockhart, United States Attorney for the Southern District of Ohio. "I commend the agents, investigators and prosecutors from the Fraud Section and our office for their hard work on this lengthy and complex case."



"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. "The FBI continues to leverage its corporate fraud expertise gained through large-scale investigations such as Enron and WorldCom, to ensure that corporations represent their true health. From Dublin, Ohio, to Houston, Texas to New York, New York, the message is clear that the FBI will not stand by as corporate executives manipulate their financial statements and conceal illegal activities from criminal and regulatory authorities."



"IRS aggressively pursues corporations and their officers who use their positions of trust for illegal activities. This kind of fraud touches the lives of many unsuspecting citizens and the public should know that the government is serious about holding corporations and their executives accountable," said Eileen C. Mayer, chief, Internal Revenue Service Criminal Investigation.



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, NCFE sold notes to investors with an aggregate value of $4.4 billion, which evidence presented at trial showed were worth approximately six cents on the dollar at the time of NCFE's bankruptcy in November 2002.



NCFE presented a business model to investors and rating agencies that called for NCFE to purchase high-quality accounts receivable from healthcare providers using money NCFE obtained through the sale of asset-backed notes to institutional investors. The evidence at trial showed that NCFE advanced money to health care providers without receipt of the requisite accounts receivable, oftentimes to healthcare providers that were owned in whole or in part by the defendants. The evidence further showed that the defendants lied to investors and rating agencies in order to cover up this fraud.



The evidence at trial showed that NCFE concealed from investors the shortfalls produced by this fraud by moving money back and forth between accounts, fabricating data in investor reports, incorporating false information into the accounting system, and making other false statements to investors and rating agencies. Moreover, the defendants' compensation was tied to the amount of money they advanced to healthcare providers and those providers' outstanding balance owed to NCFE. The government presented evidence at trial that showed that the defendants knew that the business model NCFE presented to the investing public differed drastically from the way NCFE did business within its own walls and that NCFE was making up the information contained in monthly investor reports to make it appear as though NCFE was in compliance with its own governing documents.



Defendants face the following maximum penalties: Donald H. Ayers, 55 years in prison and $2.25 million in fines; Rebecca S. Parrett, 75 years in prison and $2.5 million in fines; Randolph H. Speer, 140 years in prison and $4.25 million in fines; Roger S. Faulkenberry, 85 years in prison and $2.5 million in fines; James E. Dierker, 65 years in prison and $1.75 million in fines.



The case was prosecuted by Assistant U.S. Attorney Douglas Squires of the Southern District of Ohio, Senior Trial Attorney Kathleen McGovern and Trial Attorney Wes R. Porter of the Fraud Section, with assistance from Fraud Section Paralegal Specialists Crystal Curry and Sarah Marberg, FBI agents Matt Daly, Ingrid Schmitt, and Tad Morris, IRS Inspectors Greg Ruwe and Mark Bailey, U.S. Postal Inspector Dave Mooney and ICE Agent Celeste Koszut.



SOURCE U.S. Department of Justice