Back some nine months ago I reported in my blog about a massive “white collar crime” (see Here) where investors were defrauded of $3 Billion. Now most would have agreed – at least back then – that that was a lot of money. Frankly, after the report I did not follow up with what was taking place at sentencing. However, since then – in the most unlikely of places – my Facebook account – a reader made a comment about one of the co-conspirators – Roger S. Faulkenberry. That peaked my curiousity so I began looking. The following was reported in the Columbus Dispatch by reporter Jodi Andes. The report is as follows:
U.S. attorneys looking at federal guidelines to determine how much prison time four National Century executives should serve found that the calculations “are literally ‘off the charts,’ ” they wrote.
The numbers added up to life in prison for all four men who are to be sentenced this week for fraud that took down the Dublin-based health-care-financing company in 2002 and cost investors more than $1.9 billion.
The guidelines use a formula to calculate an appropriate penalty by taking into account things such as the amount of loss, number of victims and previous criminal history of the defendant.
At least 275 health-care companies collapsed after National Century Financial Enterprises filed bankruptcy.
The four to be sentenced are Donald H. Ayers, James E. Dierker Jr., Roger S. Faulkenberry and Randolph H. Speer.
The sentencing calculation for each of them “exceeds by several levels the maximum offense level (life in prison) provided in the guidelines,” Assistant U.S. Attorneys Wes Porter and Doug Squires wrote in papers filed in U.S. District Court.
National Century agreed to buy the debt, or accounts receivable, of health-care companies and give them cash to cover expenses. The companies didn’t have to wait for insurance reimbursement, and National Century kept a fee or percentage of what was collected.
But National Century executives paid themselves lavishly, lied to investors and didn’t keep enough money in reserve to cover debts.
Federal Judge Algenon L. Marbley isn’t obligated to follow the sentencing guidelines, and defense attorneys also filed arguments, urging lighter sentences.
For example, attorneys for Dierker, 40, said his involvement was largely limited to one company that was given more money than it had accounts receivable, making his role minimal.
Prosecutors appear to agree with the attorneys, Leonard Yelsky and Angelo Lonardo, stating in court records that Dierker “had less active participation in the conspiracy and a lesser sentence for him may be appropriate.”
Marbley is to sentence Dierker and Faulkenberry, 46, on Thursday and Ayers, 72, and Speer, 58, on Wednesday. On Friday, National Century’s Chief Executive Lance K. Poulsen, 65, could be sentenced to up to 35 years in prison for witness tampering.
Poulsen and his friend Karl A. Demmler, 57, tried to coerce the government’s key witness in the fraud case to fake amnesia about company dealings. Demmler also is scheduled to be sentenced Friday, but his attorney is asking for a delay.
Demmler is becoming “increasingly paranoid” and “said he’s saving his urine and drinking it to help his problems,” a jail log filed in court says. His attorney has asked the judge to order a psychological evaluation.
Faulkenberry’s attorney, Javier Armengau, also filed papers on his behalf, arguing that the sentences should be comparable to those in similar fraud cases.
Enron CEO Jeffrey Skilling was sentenced to 24 years in prison, and WorldCom CEO Bernard Ebbers was sentenced to 25 years, Armengau noted. Attorneys for Ayers and Speer also filed motions for reduced sentences. They had the filings blocked from public view, saying the documents contain personal information about the defendants.
Well…it’s been reported on December 31, 2008 (not such a good New Years Eve for these guys) – that a federal jury has found five former executives of National Century Financial Enterprises (NCFE) guilty of conspiracy, fraud and money laundering, following a six-week trial and less than two days of deliberation, Assistant Attorney General Alice S. Fisher and U.S. Attorney Gregory G. Lockhart of the Southern District of Ohio announced today. The Columbus, Ohio, jury returned the guilty verdict on all charges contained in a 27-count superseding indictment stemming from a scheme to deceive investors about the financial health of NCFE. The company, which was based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.
Donald H. Ayers, 71, of Fort Meyers, Fla., an NCFE vice chairman, chief operating officer, director and an owner of the company, was found guilty on charges of conspiracy, securities fraud and money laundering.
Rebecca S. Parrett, 59, of Carefree, Ariz., an NCFE vice chairman, secretary, treasurer, director and an owner of the company, was found guilty on charges of conspiracy, securities fraud, wire fraud and money laundering.
Randolph H. Speer, 58, of Peachtree City, Ga., NCFE’s chief financial officer, was found guilty on charges of conspiracy, securities fraud, wire fraud and money laundering.
Roger S. Faulkenberry, 46, of Dublin, Ohio, a senior executive responsible for raising money from investors, was found guilty on charges of conspiracy, securities fraud, wire fraud and money laundering.
James E. Dierker, 40, of Powell, Ohio, associate director of marketing and vice president of client development, was found guilty on charges of conspiracy and money laundering.
The sentences these men face are as follows:
Defendants face the following maximum penalties: Donald H. Ayers, 55 years in prison and $2.25 million in fines; Rebecca S. Parrett, 75 years in prison and $2.5 million in fines; Randolph H. Speer, 140 years in prison and $4.25 million in fines; Roger S. Faulkenberry, 85 years in prison and $2.5 million in fines; James E. Dierker, 65 years in prison and $1.75 million in fines.
Now here’s the question – if Roger S. Faulkenberry is facing up to 85 years in prison for his role… how much time is Bernie Madoff facing for masterminding a $50 BILLION fraud?
Comments are welcome!