NCFE...BIGGER THAN ENRON

Defense lawyers question National Century witness' credibility
Thursday, February 14, 2008

Defense attorneys seemed to play a game of good cop-bad cop Thursday afternoon with a former National Century Financial Enterprises Inc. vice president, as one of the lawyers questioned the truthfulness of her testimony that the company shuffled money between accounts to keep them afloat.

Jessica Bily, an associate vice president in the Dublin company's funding department, told a federal court jury in Columbus earlier in the day there wasn't enough money in two key company accounts to meet government and investor fiduciary requirements. Because of the shortfall, she said, National Century transferred money between them to keep from alarming investors.

The Justice Department has accused executives of using those accounts to defraud investors and divert money for their own benefit.

Dublin-based National Century, now defunct, bought accounts receivables from health-care providers at a discount, packaging the receivables as bonds in subsidiaries such as NPF VI and NPF XII and selling the securities to investors while collecting on its customers' bills.

Five National Century executives are facing criminal fraud, conspiracy and money laundering charges for the alleged scheme. Charged are Rebecca Parrett, Donald Ayers, Randolph Speer, Roger Faulkenberry and James Dierker. National Century CEO Lance Poulsen and executive James Happ are scheduled to stand trial separately later this year.

All have pleaded not guilty to the charges.

Throughout cross-examination Thursday afternoon, defense attorneys started with aggressive questioning, then shifted to a more conciliatory approach.

Leonard Yelsky, the attorney for Dierker, set the tone, asking Bily if her actions at the company, in which she helped to hide account shortfalls, could be considered lies. When she answered yes, Yelsky asked her to add up how many times she lied during her employment at National Century.

Bily answered she lied more than 200 times.

"How do we know you're telling the truth?" Yelsky asked. "Are you (testifying) because you're a good citizen now?"
Bily replied she was testifying because she hoped to avoid prosecution by the government in the future and because it was the right thing to do.

Yelksy later attempted to imply Bily was still lying, and called her credibility into question.

In between objections from the government that the defense attorney was being argumentative, Yelsky asked Bily questions relating to notes she had written on company documents. Many of the questions Bily did not understand.

Yelsky also attempted to prove that advances to one of Dierker's clients were paid out of the NPF XII account funds when the advances should have been made from a different fund. Bily admitted Dierker didn't sign forms authorizing advances out of NPF XII to his client, but added he knew that's where the money was being drawn.

Javier Armengau, attorney for Faulkenberry, asked questions with a lighter tone, making a point of telling Bily he would refer to her actions at National Century as errors and not lies. He then asked if she agreed National Century's goal was to do everything it could to help its health-care clients stay in business, to which Bily agreed.

Armengau also asked Bily about the information she gave to the FBI. In particular, Bily acknowledged she told the FBI there were no efforts by those at National Century to conceal cash advances the company made to clients over and above the receivables for which the company had paid.

She also said she told FBI agents many National Century employees were reluctant participants in actions that Poulsen asked them to take.