A federal jury in Ohio convicted the founder of a failed health care company of trying to bribe a witness in an upcoming $1.9 billion fraud trial. The jury took one day to deliver its decision against Lance Poulsen, former chief executive officer of National Century Financial Enterprises, described as the nation's largest health care financing firm before its 2002 bankruptcy.
Poulsen was accused of offering a former company executive $500,000 to give misleading testimony during Poulsen's fraud trial scheduled for August. The executive, Sherry Gibson, told jurors that Karl Demmler, a long time friend to her and Poulsen, told her that Poulsen ''wanted to make me whole.''
The jury also convicted Demmler, who prosecutors had accused of acting as an intermediary for Poulsen to contact Gibson.
Gibson pleaded guilty in 2003 for her role in the National Century fraud case in exchange for cooperating with prosecutors.
Poulsen and Demmler face up to 35 years in prison for their convictions on all counts of an indictment alleging conspiracy, witness tampering and obstruction of justice. U.S. District Judge Algenon Marbley ordered Demmler taken into custody. Poulsen has been held in a jail in Chillicothe, Ohio.
Earlier this month a federal jury convicted five former executives of NCFE after a five-week trial. The charges stemmed from what federal prosecutors called "a scheme to deceive investors about the financial health of NCFE," which collapsed in 2002 several days after FBI agents raided its Dublin, Ohio headquarters.
NCFE purchased medical accounts receivable from providers who were typically on tentative financial ground. The company raised the funds to purchase the accounts by selling AAA-rated, asset-backed bonds or notes to investors, according to prosecutors. Prosecutors said that the fraud led to the bankruptcy of approximately 275 healthcare providers and cost investors more than $1.9 billion.
Four former NCFE executives have already pleaded guilty. James Happ, vice president of servicer operations, will be tried in October. -- by the Associated Press and Cinda Becker
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