Bigger than Enron...what about the Tennessee Largest Bankruptcy

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.

Leo J. Wise, Staff Director & Chief Counsel

OFFICE OF CONGRESSIONAL ETHICS
UNITED STATES HOUSE OF REPRESENTATIVES
WASHINGTON, D. C. 20515
FOR IMMEDIATE RELEASE Contact: Leo Wise
April 15, 2009 oce@mail.house.gov

PRESS ADVISORY:
OFFICE OF CONGRESSIONAL ETHICS RELEASES FIRST QUARTER REPORT
The Office of Congressional Ethics, established by the House of Representatives, is an independent, non-partisan entity charged with receiving and reviewing allegations of misconduct concerning House Members and staff and, when appropriate, referring matters to the Committee on Standards of Official Conduct (commonly referred to as the Ethics Committee).
Consistent with the desire of the House for more transparency in these matters, the OCE released today a report of its activities for the first quarter, January to March, of 2009.

# # #

Leo J. Wise, Staff Director & Chief Counsel
1017 Longworth House Office Building
(202) 225-9739
(202) 226-0997 fax

David Skaggs, Chair Porter Goss, Co-Chair
Yvonne Burke Jay Eagen
Karan English William Frenzel
Allison Hayward Abner Mikva

In 1997, as part of Richard Scott's severance package from Columbia he was paid $5.13 million and given a five year consulting contract at $950,000 per year

1997 + 5 = 2002

Remember- 1997 Columbia just decided to sell its home health-care business.

In 2002 FBI raided the offices of National Century Financial Enterprises in Dublin, Ohio

“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.

Guess where those home health care units were found?

Yes- "...largest corporate fraud investigations involving a privately held company headquartered in small town America,”

Why the need for ‘healthcare financial service’ i.e. (NCFE) National Century Financial Enterprises?

Home health - which was struggling under the Balanced Budget Act of 1997; about 1,400 agencies closed nationwide in 1998.


On Sept 8, 1998 Standard and Poors downgraded the bonds of Charter/HCA to negative bases on
poor earnings. Looks like Rainwater and his Crescent Cos' have finally stumbled. One source within the company said it would be a long while before any new high-ticket acquisitions would take place. A previous deal with Prudential is in danger of being jettisoned.


Part Four- Richard (aka Rick) Scott/Conservatives for Patients' Rights

A 2009 article from - The Wall Street Journal reported that Richard Scott, "the former chief executive of HCA Inc," had formed the non-profit organization Conservatives for Patients' Rights as part of a "lobbying campaign to derail or modify" President Obama's health care proposals, but failed to note that Scott resigned from HCA in 1997 amid a federal investigation into the company's Medicare billing, physician recruiting, and home-care practices. HCA eventually pleaded guilty to fraud charges and paid approximately $1.7 billion in fines and penalties.


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.

Enron and National Century Financial Enterprises, one of the largest corporate fraud investigations involving a privately held company headquartered in small town America.

On 3-9-2006 10-K SEC Filing, filed by J P MORGAN CHASE & CO: 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

Friday, March 14, 2008 3:16 AM
Guilty, guilty, guilty, guilty...

5 National Century executives face prison time for fraud

BY JODI ANDES AND KEVIN MAYHOOD
THE COLUMBUS DISPATCH

It seemed the jury had little doubt about the guilt of the former National Century executives accused of the nation's biggest private fraud.

After a day and a half of deliberation, the jury of eight women and four men came back with a determination of "guilty" for every one of the 40 charges against two of the Dublin company's founders and three of its former executives.

March 26, 2008; By Jodi Andes; THE COLUMBUS DISPATCH

Nine other executives have been convicted or pleaded guilty in National Century's collapse.

Only Poulsen and executive James Happ still await trial.

FOR IMMEDIATE RELEASE--Friday, October 31, 2008--WWW.USDOJ.GOV

Former National Century Financial Enterprises CEO Convicted of Conspiracy, Fraud and Money Laundering

Fraud Cost Investors More Than $2 Billion

November 2008 - Only executive James Happ still await trial.

December 18, 2008 - The ONE AND ONLY acquittal; James K Happ!

By Jodi Andes THE COLUMBUS DISPATCH

Prosecutors' case fell short; juror says National Century fraud case produces 1st acquittal

The "not guilty" verdicts that came in federal court yesterday were not so much a vindication of the last National Century Financial Enterprises executive to stand trial, a juror said.

Instead, they were more a belief that:

‘federal prosecutors had not done their job ‘

the juror said after he and his fellow jurors acquitted James K. Happ of five counts after 12 hours of deliberation.

"He very well may have been guilty. A lot of us thought he was," said the juror

December 18, 2008 - the ONE AND ONLY acquittal- James K Happ

Who is James K Happ?

SEC Form September 9, 2003 Annual Meeting of Stockholders, Med Diversified Inc.:

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.,

CFO of Dallas-based Columbia Homecare Group, Inc.?

James K Happ … 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

Richard Rainwater and Darla Moore in 1997, as part of Richard Scott's severance package from Columbia was paid $5.13 million and given a five year consulting contract at $950,000 per year