Tennessee's Largest Bankruptcy in 1999 held most of NCFE so called purchases.
What about the bankruptcy fraud for the case filed July 29, 1999 in Memphis Bankruptcy Court? All the NCFE Debtor in Posession finance tool used to hide Columbia Homecare Group?
The court room full of lawyers cried FRAUD- the judge forbade the 'F' word in her court.
National Century victims awaiting repayment
Sunday, May 3, 2009 3:22 AM
By John Futty
THE COLUMBUS DISPATCH
When National Century Financial Enterprises collapsed into fraud-fueled bankruptcy, few investors were hit as hard as those in Arizona.
More than 100 of the state's agencies and communities were in an investment pool that held notes worth $131 million in the Dublin-based health-care finance company. Chandler, Ariz., a suburb of Phoenix, took the largest individual hit, losing $13 million.
"There was shock, there was disbelief," said Nachie Marquez, a spokeswoman for the city. "It's taxpayer funds. You put your trust in an investment pool and you think it's safe."
The Arizona investors were among hundreds of institutional victims across the U.S. whose losses totaled $2.38 billion -- the largest known fraud case in the country involving a private company.
The government is "aggressively working" to recover the money from the founders and executives of National Century. They were ordered to pay restitution after they were convicted in federal court in Columbus of conspiracy, securities fraud, mail fraud and money laundering, said Assistant U.S. Attorney Doug Squires.
Last week, U.S. District Judge Algenon L. Marbley issued an order requiring National Century co-founder Lance K. Poulsen, considered the architect of the scheme, and his co-conspirators to forfeit $1.7 billion in assets, the amount prosecutors say represents the proceeds of the conspiracy.
But attorneys for the victims say they are more likely to recover the most significant amounts through lawsuits filed against financial institutions that allegedly are liable for the fraud.
"While we appreciate the government's efforts to squeeze money out of the individual criminal defendants," the financial institutions named in the civil litigation "are able to pay much more than any of these folks have," said Scott Humphries of Houston-based Gibbs & Bruns. The law firm represents investors who lost a total of $1.6 billion.
Investors filed a flurry of lawsuits against National Century, its executives and its financial advisers after the company filed for bankruptcy in 2002. The suits, involving hundreds of plaintiffs in five states, were combined in 2003 and assigned to one federal judge in Columbus.
JPMorgan Chase, a trustee for National Century funds, agreed to pay $425 million to settle its portion of the lawsuit in February 2006, according to an annual report it filed with the Securities and Exchange Commission.
The plaintiffs said JPMorgan Chase was negligent in allowing National Century to make fraudulent transfers among its accounts and for not detecting or revealing the illegal activity to investors.
Settlement money and insurance coverage helped the city of Chandler recoup some of its losses, Marquez said.
"We've recovered about 40 cents on the dollar for our clients," Humphries said.
Civil litigation continues against Credit Suisse, the investment bank that issued National Century's bonds.
Meanwhile, the U.S. attorney's office has collected $2.3 million so far from the criminal defendants, said Fred Alverson, an office spokesman.
The total includes $396,178 that federal agents seized in March from the bank account of Rebecca S. Parrett, a National Century executive who has been a fugitive since shortly after her conviction in March 2008.
The money recovered from the defendants was delivered to the federal clerk's office but has not been distributed to any victims, Alverson said.
National Century purchased the accounts receivable from hospitals, clinics and nursing homes using money obtained by selling asset-backed notes to institutional investors.
Evidence in the criminal trials showed that the company executives diverted money to support their lavish lifestyles and made unsecured loans to the health-care providers, leading to the company's collapse.
The bankruptcy process had begun in 2002 when the FBI obtained a warrant to search the company's Dublin headquarters. Agents collected more than 2,000 boxes of documents and computer files that formed the basis for an investigation involving the FBI, the Internal Revenue Service, U.S. postal inspectors and Immigration and Customs Enforcement.
Institutional investors, which included police and firefighter pension funds, churches, labor unions, cities and counties, and insurance companies, were led to believe the company's bonds were among the safest investments available.
The business model presented to investors was solid but never followed by the company, Squires said.
"(Company executives) did not dip their toes in the pool of fraud, they jumped in from Day One," he said. "From the first investor report, it was fraudulent."
The assets of the conspirators were researched by the federal probation office, but the information is not public record. Defense attorneys have said their clients' assets largely were exhausted while fighting the criminal charges.
Squires said the U.S. attorney's office will attempt to get "every available penny" from those convicted by seizing bank accounts, pensions, 401(k)s and property.
jfutty@dispatch.com
--------------------------------------------------------------------------------
On the Web • Watch a video of Assistant U.S. Attorney Doug Squires at Dispatch.com/video. For complete coverage of the National Century case, visit Dispatch.com/metro.
Showing posts with label National Century Financial Enterprises. Show all posts
Showing posts with label National Century Financial Enterprises. Show all posts
Monday, May 4, 2009
Tuesday, December 16, 2008
James K. Happ...Before joining National Century, Happ had worked at a health-care company that received millions of dollars in unmerited advances...
...Happ's motive couldn't be about money, Gillen said: He earned more at his employment before and after working at National Century...
Before joining National Century, Happ had worked at a health-care company that received millions of dollars in unmerited advances from National Century.
GUESS WHO OWNED THAT COMPANY? Columbia Homecare Group,Inc. Fort Worth Texas. But one needs to go look at the Largest Bankruptcy Filed July 1999 in Tennessee, just months prior to the FBI raid in Ohio !
Ten executives of the defunct health-care lender have been convicted for their roles in a multibillion-dollar fraud that bankrupted health-care companies and hurt investors, including pension funds, across the country.
Jury begins deliberating fate of last of 11 National Century execs
Monday, December 15, 2008 7:54 PM
By Jodi Andes
THE COLUMBUS DISPATCH
Closing arguments today in federal court were the beginning of the end for trials involving executives in the nation's largest case of fraud by a privately held company.
The criminal cases against officials of National Century Financial Enterprises started when the company collapsed into bankruptcy more than six years ago.
James K. Happ, 48, who oversaw the purchase of accounts receivable at the Dublin-based company, is charged with fraud tied to the company's 2002 collapse. He is the last of 11 executives charged with fraud to have his case go through the court.
The jury is expected to begin deliberations first thing Tuesday.
Before joining National Century, Happ had worked at a health-care company that received millions of dollars in unmerited advances from National Century."He knew about the problems at NCFE before he joined and did it anyway. This is a man who joined with eyes wide open," federal prosecutor N. Nathan Dimock said in closing arguments.
National Century bought accounts receivable from health-care providers and collected them for a fee. Cash to buy the accounts receivable was generated by the sale of bonds to investors. But investors were never told about money being given to health-care providers without getting the accounts receivable in return, prosecutors have alleged.
Investors should have known about the advances because it was disclosed in the company's financial documents, said Happ's defense attorney, Craig A. Gillen.
Gillen stood beside a large numeral "0" placed on an easel. He said the zero represented the amount of false statements Happ gave to investors, the number of financial reports he falsified and the number of times he lied to federal investigators.
"Jim Happ didn't commit any crime. Didn't join any conspiracy. He didn't have any motive to," Gillen said.
Federal prosecutors Dimock and Doug Squires have said Happ had the motive to further the conspiracy because his and others' quarterly bonuses grew with each advance to health-care providers.
But Happ's motive couldn't be about money, Gillen said: He earned more at his employment before and after working at National Century.
Happ's attorneys did not put any witnesses on the stand, nor did he testify in the 11-day trial.
Happ, 48, faces charges of conspiracy, money-laundering conspiracy and three counts of wire fraud in U.S. District Court in Columbus.
Ten executives of the defunct health-care lender have been convicted for their roles in a multibillion-dollar fraud that bankrupted health-care companies and hurt investors, including pension funds, across the country.
Six of those convicted have been sentenced to terms ranging from four to 15 years in prison. One, Rebecca S. Parrett, remains at large, having taken off while awaiting sentencing. Former CEO Lance K. Poulsen and two others await sentencing.
jandes@dispatch.com
Before joining National Century, Happ had worked at a health-care company that received millions of dollars in unmerited advances from National Century.
GUESS WHO OWNED THAT COMPANY? Columbia Homecare Group,Inc. Fort Worth Texas. But one needs to go look at the Largest Bankruptcy Filed July 1999 in Tennessee, just months prior to the FBI raid in Ohio !
Ten executives of the defunct health-care lender have been convicted for their roles in a multibillion-dollar fraud that bankrupted health-care companies and hurt investors, including pension funds, across the country.
Jury begins deliberating fate of last of 11 National Century execs
Monday, December 15, 2008 7:54 PM
By Jodi Andes
THE COLUMBUS DISPATCH
Closing arguments today in federal court were the beginning of the end for trials involving executives in the nation's largest case of fraud by a privately held company.
The criminal cases against officials of National Century Financial Enterprises started when the company collapsed into bankruptcy more than six years ago.
James K. Happ, 48, who oversaw the purchase of accounts receivable at the Dublin-based company, is charged with fraud tied to the company's 2002 collapse. He is the last of 11 executives charged with fraud to have his case go through the court.
The jury is expected to begin deliberations first thing Tuesday.
Before joining National Century, Happ had worked at a health-care company that received millions of dollars in unmerited advances from National Century."He knew about the problems at NCFE before he joined and did it anyway. This is a man who joined with eyes wide open," federal prosecutor N. Nathan Dimock said in closing arguments.
National Century bought accounts receivable from health-care providers and collected them for a fee. Cash to buy the accounts receivable was generated by the sale of bonds to investors. But investors were never told about money being given to health-care providers without getting the accounts receivable in return, prosecutors have alleged.
Investors should have known about the advances because it was disclosed in the company's financial documents, said Happ's defense attorney, Craig A. Gillen.
Gillen stood beside a large numeral "0" placed on an easel. He said the zero represented the amount of false statements Happ gave to investors, the number of financial reports he falsified and the number of times he lied to federal investigators.
"Jim Happ didn't commit any crime. Didn't join any conspiracy. He didn't have any motive to," Gillen said.
Federal prosecutors Dimock and Doug Squires have said Happ had the motive to further the conspiracy because his and others' quarterly bonuses grew with each advance to health-care providers.
But Happ's motive couldn't be about money, Gillen said: He earned more at his employment before and after working at National Century.
Happ's attorneys did not put any witnesses on the stand, nor did he testify in the 11-day trial.
Happ, 48, faces charges of conspiracy, money-laundering conspiracy and three counts of wire fraud in U.S. District Court in Columbus.
Ten executives of the defunct health-care lender have been convicted for their roles in a multibillion-dollar fraud that bankrupted health-care companies and hurt investors, including pension funds, across the country.
Six of those convicted have been sentenced to terms ranging from four to 15 years in prison. One, Rebecca S. Parrett, remains at large, having taken off while awaiting sentencing. Former CEO Lance K. Poulsen and two others await sentencing.
jandes@dispatch.com
Monday, December 1, 2008
JPMorgan Chase & Co., the largest U.S. bank by market value
JPMorgan Chase & Co., the largest U.S. bank by market value, agreed to pay $425 million in 2006 to settle claims by Arizona noteholders. The noteholders said JPMorgan and other banks underwrote or were trustees of the notes used to defraud investors.
Thursday, November 06, 2008
National Century Financial Enterprises CEO Convicted
Last week, multiple news stories described convictions in the case of a remarkable health care fraud, affecting the now bankrupt National Century Financial Enterprises. Let me begin with a description of what the company did, from an article in the Columbus Dispatch:
National Century Financial Enterprises ... began in 1991 to offer financing to small hospitals, clinics, nursing homes and other health-care providers. Using investors' funds, the Dublin company bought the providers' debt and gave them cash to cover expenses. It kept a fee or percentage of what was collected.
Or, as Columbus Business First put it,
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 workers at its office campus in Dublin while recording annual revenue of more than $250 million.
However, prosecutors charged that it was all a huge fraud, per an earlier story in the Columbus Dispatch:
A Dublin-based health-care lender with a good business model was left in ruins -- and owing billions of dollars -- as a result of greed and a shell game played unknowingly by investors.
It's a game that ended only after greed consumed company reserves and investor money dried up. That's the history of National Century Financial Enterprises, federal prosecutor Leo Wise told jurors in closing arguments yesterday in the trial of Lance K. Poulsen, 65, the company's founder and chief executive.
Poulsen has been on trial since Oct. 1 on 13 counts of fraud tied to the company's collapse. Jury deliberations are expected to begin today.
'Ladies and gentlemen, this is a case of staggering fraud,' Wise said. 'It is one of the largest frauds the FBI has ever investigated. The total is over $2 billion.'
Poulsen, again the company's founder and CEO, was convicted, per Columbus Business First,
A federal court jury has found National Century Financial Enterprises’ co-founder Lance Poulsen guilty of directing what the government called the biggest corporate fraud to surface at a privately held U.S. business.
The 65-year-old Poulsen was found guilty on all of the charges facing him – one count each of conspiracy to commit securities fraud, wire fraud and conspiracy to commit money laundering, as well as three counts of money laundering and six counts of securities fraud.
Poulsen was not the only leader of National Century Financial Enterprises who was convicted or pleaded guilty, again per Columbus Business First,
It also was the second time a federal jury found National Century executives guilty of crimes. Five of Poulsen’s co-executives were convicted in March of multiple fraud-related charges. Donald Ayers, Rebecca Parrett, Roger Faulkenberry, Randolph Speer and James Dierker are serving prison terms. Parrett, a co-founder of National Century, disappeared in March before she was scheduled for a court appearance and remains at large.
This was actually not Poulsen's criminal conviction on charges related to the collapse of National Century Financial Enterprises, again from Columbus Business First,
Poulsen heard a guilty verdict earlier this year on a related case. He and associate Karl Demmler were convicted in the witness tampering trial in March after trying to bribe government witness Sherry Gibson into changing her planned testimony. Poulsen was given 10 years in prison and ordered to pay a $17,500 fine on the bribery conviction, but Demmler has yet to be sentenced.
In a foreshadowing of the current worldwide financial crisis, it appears that other, and more widely respected financial institutions got caught up in this mess, per Bloomberg News,
JPMorgan Chase & Co., the largest U.S. bank by market value, agreed to pay $425 million in 2006 to settle claims by Arizona noteholders. The noteholders said JPMorgan and other banks underwrote or were trustees of the notes used to defraud investors.
The National Century Financial Enterprises collapse affected not only investors, but health care providers, again per Bloomberg,
National Century's collapse hastened the bankruptcies of 275 hospitals, clinics, nursing homes and other health-care providers, according to prosecutors and regulators.
So add Lance Poulsen to our rogue's gallery of health care leaders convicted of fraud, corruption, or other white-collar crimes related to their health care leadership roles.
This is yet another case suggesting that something has gone very wrong with the leadership of important health care organizations. That the activities that doomed National Century Financial Enterprises went on for so long, and involved so many of its top leaders, suggest a disastrously unethical corporate culture that seemingly was effectively concealed from both investors and the health care providers with whom the company did business.
Again, this case argues why we need more transparency, accountability, and commitment to ethical principles in the governance of health care organizations. More specifically, and as I have argued before, this case suggests the need for developing a licensure process for leaders of health care organizations. Licensing doctors and health professionals has been going on for a long time. But now leaders of health care organizations, from hospitals to drug companies, have as much if not more influence over health care, and hence the health and safety of patients as do doctors. Yet there are no requirements that leaders of health care organizations have any particular educational background, knowledge, commitment to health care values, or, for that matter, that they have not committed crimes. Given the scope of bad leadership discussed on Health Care Renewal, maybe a licensing process for health care executives would at least ensure that they have not served time in the brig for theft.
Thursday, November 06, 2008
National Century Financial Enterprises CEO Convicted
Last week, multiple news stories described convictions in the case of a remarkable health care fraud, affecting the now bankrupt National Century Financial Enterprises. Let me begin with a description of what the company did, from an article in the Columbus Dispatch:
National Century Financial Enterprises ... began in 1991 to offer financing to small hospitals, clinics, nursing homes and other health-care providers. Using investors' funds, the Dublin company bought the providers' debt and gave them cash to cover expenses. It kept a fee or percentage of what was collected.
Or, as Columbus Business First put it,
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 workers at its office campus in Dublin while recording annual revenue of more than $250 million.
However, prosecutors charged that it was all a huge fraud, per an earlier story in the Columbus Dispatch:
A Dublin-based health-care lender with a good business model was left in ruins -- and owing billions of dollars -- as a result of greed and a shell game played unknowingly by investors.
It's a game that ended only after greed consumed company reserves and investor money dried up. That's the history of National Century Financial Enterprises, federal prosecutor Leo Wise told jurors in closing arguments yesterday in the trial of Lance K. Poulsen, 65, the company's founder and chief executive.
Poulsen has been on trial since Oct. 1 on 13 counts of fraud tied to the company's collapse. Jury deliberations are expected to begin today.
'Ladies and gentlemen, this is a case of staggering fraud,' Wise said. 'It is one of the largest frauds the FBI has ever investigated. The total is over $2 billion.'
Poulsen, again the company's founder and CEO, was convicted, per Columbus Business First,
A federal court jury has found National Century Financial Enterprises’ co-founder Lance Poulsen guilty of directing what the government called the biggest corporate fraud to surface at a privately held U.S. business.
The 65-year-old Poulsen was found guilty on all of the charges facing him – one count each of conspiracy to commit securities fraud, wire fraud and conspiracy to commit money laundering, as well as three counts of money laundering and six counts of securities fraud.
Poulsen was not the only leader of National Century Financial Enterprises who was convicted or pleaded guilty, again per Columbus Business First,
It also was the second time a federal jury found National Century executives guilty of crimes. Five of Poulsen’s co-executives were convicted in March of multiple fraud-related charges. Donald Ayers, Rebecca Parrett, Roger Faulkenberry, Randolph Speer and James Dierker are serving prison terms. Parrett, a co-founder of National Century, disappeared in March before she was scheduled for a court appearance and remains at large.
This was actually not Poulsen's criminal conviction on charges related to the collapse of National Century Financial Enterprises, again from Columbus Business First,
Poulsen heard a guilty verdict earlier this year on a related case. He and associate Karl Demmler were convicted in the witness tampering trial in March after trying to bribe government witness Sherry Gibson into changing her planned testimony. Poulsen was given 10 years in prison and ordered to pay a $17,500 fine on the bribery conviction, but Demmler has yet to be sentenced.
In a foreshadowing of the current worldwide financial crisis, it appears that other, and more widely respected financial institutions got caught up in this mess, per Bloomberg News,
JPMorgan Chase & Co., the largest U.S. bank by market value, agreed to pay $425 million in 2006 to settle claims by Arizona noteholders. The noteholders said JPMorgan and other banks underwrote or were trustees of the notes used to defraud investors.
The National Century Financial Enterprises collapse affected not only investors, but health care providers, again per Bloomberg,
National Century's collapse hastened the bankruptcies of 275 hospitals, clinics, nursing homes and other health-care providers, according to prosecutors and regulators.
So add Lance Poulsen to our rogue's gallery of health care leaders convicted of fraud, corruption, or other white-collar crimes related to their health care leadership roles.
This is yet another case suggesting that something has gone very wrong with the leadership of important health care organizations. That the activities that doomed National Century Financial Enterprises went on for so long, and involved so many of its top leaders, suggest a disastrously unethical corporate culture that seemingly was effectively concealed from both investors and the health care providers with whom the company did business.
Again, this case argues why we need more transparency, accountability, and commitment to ethical principles in the governance of health care organizations. More specifically, and as I have argued before, this case suggests the need for developing a licensure process for leaders of health care organizations. Licensing doctors and health professionals has been going on for a long time. But now leaders of health care organizations, from hospitals to drug companies, have as much if not more influence over health care, and hence the health and safety of patients as do doctors. Yet there are no requirements that leaders of health care organizations have any particular educational background, knowledge, commitment to health care values, or, for that matter, that they have not committed crimes. Given the scope of bad leadership discussed on Health Care Renewal, maybe a licensing process for health care executives would at least ensure that they have not served time in the brig for theft.
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