Purchasing accounts receivable from health-care providers at a discount

7 indicted in National Century failure

Business First of Columbus - May 22, 2006 by Kevin KemperBusiness First

Seven former executives of the defunct National Century Financial Enterprises were indicted Monday on money laundering, conspiracy and securities fraud charges stemming from the Dublin company's 2002 collapse.

Officials alleged the company's collapse was the largest corporate fraud case involving a privately held company that the FBI has investigated. The 60-count indictment seeks to recover about $2 billion in property.

The indictment alleges about $3 billion disappeared in a complex accounting scheme run by executives of the health-care financial services firm. U.S. Attorney Gregory G. Lockhart said that in the almost three years since the company collapsed, investigators have been able to recover $1 billion.

National Century filed for Chapter 11 bankruptcy protection after ratings on its bonds were cut to "junk" grade, employees started receiving bad checks from the business and the FBI raided the company's headquarters.

The company's bread and butter was purchasing accounts receivable from health-care providers at a discount, then giving the providers their money up front. National Century would then package the receivables as asset-backed bonds and sell them to raise cash.

The government has alleged executives falsified the company's books and tried to conceal the fraud from investors.

The collapse pushed several health-care companies into bankruptcy when they stopped receiving money.

"The types of criminal acts uncovered by this investigation and charged in this indictment are not crimes of passion but rather crimes of immense greed," said Brian Moskowitz, special agent in charge at the Bureau of Immigration and Customs Enforcement.

Indicted were:

Lance K. Poulsen, 62, president, chairman and director, charged with a count of conspiracy, six counts of securities fraud, 11 counts of mail fraud, 14 counts of wire fraud, one count of money laundering conspiracy, seven counts of promotion of money laundering and seven counts of concealment of money laundering.
Rebecca S. Parrett, 57, vice chairwoman, charged with one count of conspiracy, six counts of securities fraud, 11 counts of mail fraud, 10 counts of wire fraud, one count of money laundering conspiracy, and seven counts of promotion of money laundering.
Donald H. Ayers, 70, also vice chairman and chief operating officer, charged with a count of conspiracy, six counts of securities fraud, 11 counts of mail fraud, nine counts of wire fraud, a count of money laundering conspiracy and seven counts of promotion of money laundering.
Roger S. Faulkenberry, 45, director of securitizations, charged with a count of conspiracy, six counts of securities fraud, 11 counts of mail fraud, 10 counts of wire fraud, one count of money laundering conspiracy and two counts of concealment of money laundering.
Randolph H. Speer, 55, chief financial officer and executive vice president, charged with one count of conspiracy, three counts of securities fraud, 11 counts of mail fraud, 13 counts of wire fraud, one count of money laundering conspiracy, seven counts of promotion of money laundering and six counts of concealment of money laundering.
James E. Dierker, 38, vice president in charge of client development, charged with one count of conspiracy, 11 counts of mail fraud, nine counts of wire fraud, one count of money laundering conspiracy, and three counts of concealment of money laundering.
Jon A. Beacham, 39, a director and vice president of securitizations, charged with one count of conspiracy, six counts of securities fraud, 11 counts of mail fraud, 12 counts of wire fraud, and one count of money laundering conspiracy.
In addition to the seven recently indicted, three other former NCFE executives have pleaded guilty to charges linked to the business' collapse.

Sherry L. Gibson, executive vice president, pleaded guilty in 2003 and was ordered to forfeit her entire net worth, estimated between $300,000 and $500,000.
Brian J. Stucke, director of compliance, pleaded guilty in 2003 to a felony count of conspiracy to commit securities fraud.
John Allen Snoble, controller, pleaded guilty to a charge of conspiracy to launder money in 2004.