With the addition of an eighth defendant, there was some movement last week in the long-simmering case against former executives of National Century Financial Enterprises, the healthcare financing giant whose collapse brought down hundreds of financially fragile providers.
A federal grand jury returned a superseding indictment that added James Happ of Palm Beach Gardens, Fla., a certified public accountant who was once vice president of servicer operations and later executive vice president of servicer operations at NCFE. Happ was named along with seven other former executives who were initially indicted in May 2006, including Lance Poulsen, the former president, chairman and chief executive officer of the Dublin, Ohio-based healthcare financing company (May 29, 2006, p. 8). Happs attorney did not respond to a request seeking comment.
NCFE, which was in the business of purchasing medical accounts receivable from providers who were typically in financial straits, was one of the largest healthcare finance companies in the U.S. until it filed for bankruptcy in November 2002. Its collapse triggered the bankruptcy of approximately 275 healthcare providers who had relied on NCFEs loans to sustain their teetering balance sheets.
The indictment charges all eight former executives of the collapsed company with conspiring to defraud investors by diverting millions of dollars in investors funds, fabricating data in investors reports, and moving money back and forth between accounts in order to conceal investor fund shortfalls, according to U.S. Attorney Gregory Lockhart in Columbus, Ohio.
A trial is set for Nov. 5 in Columbus.
The 27-count indictment, streamlined from the original 60-count indictment alleges conspiracy, securities fraud, wire fraud, money laundering and money laundering conspiracy. It also seeks $1.9 billion in forfeiture of property representing the proceeds of the conspiracy.
The streamlined charges make the job easier for the judge and jury, said William Hunt, first assistant U.S. attorney. If you add up all the potential years, its more (jail) time than anyone could serve anyway.