$3 billion fraud scheme

05/23/06
Local man charged in $3 billion fraud scheme

FBI arrests Lance Poulsen at his Grassy Point home


PORT CHARLOTTE -- A former CEO of a medical finance firm was arrested by the FBI Monday at his Grassy Point home after a federal grand jury indicted him and several others in a $3 billion fraud scheme.

After a more than three-year investigation, Lance K. Poulsen was charged with six counts of securities fraud, 11 counts of mail fraud, 14 counts of wire fraud, seven counts of promotion of money laundering and concealment of money laundering, and one count of conspiracy and money laundering conspiracy.

Poulsen, 62, served as president, chairman and director of National Century Financial Enterprises from its inception in 1991 until it went bankrupt in 2002.

The Dublin, Ohio-based company provided billions of dollars for more than 60 health care providers nationwide. NCFE would buy the financially-challenged companies' unpaid insurance claims and then use those claims as collateral and sell bonds to finance other deals.

On May 19, a federal grand jury in Columbus, Ohio, announced the 60-count indictment, which seeks about $2 billion in forfeiture of property involved in the money laundering conspiracy.

The indictment also alleges that instead of using the investors' funds as promised, Poulsen and six other company employees diverted funds to make unsecured advances and loans to health care companies owned by National Century or National Century's owners: Poulsen, Rebecca Parrett, 57, of Arizona, and Donald Ayers, 70, of Fort Myers.

According to records, NCFE executives diverted the money into other companies they owned, used some of the money for operating expenses for NCFE and provided unsecured advances and loans to clients, third parties and others.

The FBI served the warrant on Poulsen Monday morning and took him to a Fort Myers federal court, where he stood before the federal magistrate just a few hours after his arrest.

"He was issued a $1 million bond with the agreement he would forfeit his home if he doesn't turn himself to the federal court in Columbus, Ohio, by Thursday," said Fred Alverson, spokesman for the United States Department of Justice Southern District of Ohio.

According to the Charlotte County Tax Appraisers Web site, Poulsen's home is assessed at nearly $1.1 million.

Alverson said Poulsen also had to turn in his passport and he cannot travel other than to Ohio. He was also ordered to not use his 58-foot yacht valued at $2 million.

"There is no room in the business world for the kind of multi-billion dollar fraud and money laundering alleged in the indictment against the National Century executives," said Assistant Attorney General Alice S. Fisher of the Criminal Division. "The Department of Justice will continue its policy of aggressive investigation and prosecution to deter such conduct and restore investor confidence in the marketplace."

Poulsen and his codefendants are accused of conspiring to conceal cash shortages from investors and trustees by using carefully timed transfers of funds between companies.

In one instance, Poulsen and the others allegedly ordered $148 million moved into one of their subsidiaries so the investments would appear sound. The next day, they moved the money back to create the same appearance for another subsidiary.

When NCFE was first being investigated, Poulsen denied the allegations, according to story that appeared in USA Today on Dec. 19, 2002.

The maximum penalty for each count of money laundering and money laundering conspiracy is 20 years in prison and a $500,000 fine. The other charges of wire fraud, mail fraud and securities fraud carries a five-year term in prison and a $250,000 fine.

The others indicted were:

* Roger S. Faulkenberry, 45, of Dublin, Ohio;

* Randolph H. Speer, 55, of Peachtree City, Ga.;

* James E. Dierker, 38, Powell, Ohio;

* Jon A. Beacham, 39, of Grosse Pointe, Mich.

You can e-mail Alyssa Schnugg at schnugg@sun-herald.com.


By ALYSSA SCHNUGG

Staff Writer