Health Care CEO Convicted Of Money Laundering And Security Fraud
A federal jury in Ohio has convicted the former CEO of a failed health care financing company in a $1.9 billion fraud case that has been likened to the Enron or WorldCom scandals.
After being on trial for over one month, Lance Poulsen, 65, founder of National Century Financial Enterprises, was found convicted of fabricating data, moving money between accounts to hide shortfalls and misleading investors who funded his business model. Poulsen was found guilty on all 20 accounts of securities fraud and money laundering filed against him.
Poulsen faces up to 135 years in prison, although his sentence will likely be shorter due to federal-sentencing guidelines. A sentencing date has not been set, however his attorneys are preparing an appeal against the decision.
Poulsen, who was convicted in March and sentenced to 10 years in prison for attempting to bribe a witness, characterized himself as a rags-to-riches success story whose legitimate business was destroyed by the government.
Poulsen remains disappointed that U.S. District Court Judge Algenon Marbley allowed jurors to hear evidence of Poulsen’s bribery conviction, defense attorney Pete Anderson said Friday.
Anderson said that information should have been excluded under rules of evidence, explaining that “it’s always a risk when a jury learns of a previous conviction.”
Poulsen had testified he did nothing illegal and was, at most, guilty of overseeing a company that might have grown too fast.
But the government’s key witness, former company Executive Sherry Gibson, testified that she falsified numbers in investors’ reports on Poulsen’s orders. Gibson pleaded guilty in 2003 to conspiracy to commit wire and securities fraud.
The government claim Poulsen kept two sets of books and signed off on falsified reports.
Poulsen founded the National Century Financial Enterprises based in Dublin, Ohio, in the early 1990s.
The company offered financing to small hospitals, nursing homes and other health care providers by purchasing their accounts receivable, usually for 80 or 90 cents on the dollar, so they wouldn’t have to wait for insurance payments. The company then collected the full amount of the payments.
National Century raised the money to fund its business by selling bonds to investors and at its height; the company was making millions employing more than 300 people. Poulsen alone earned more than $9.1 million between 1996 and 2002, according to the government. He also owned a yacht, a private corporate jet and a Florida mansion.
The company finally declared bankruptcy in 2002 after the FBI raided its offices.
At least nine former National Century executives have been convicted of corporate fraud related to the case. In closing arguments Thursday, U.S. trial attorney Leo Wise called the case one of the largest frauds ever investigated by the FBI.
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