Reply #13: Big healthcare fraud trial in Columbus, Ohio

[DemReadingDU]

2/3/08 As fraud cases go, the National Century Financial Enterprises case ranks up there with Enron and WorldCom, prosecutors say.

Investors in the Dublin-based company lost more than $1.9 billion after the financing giant filed for bankruptcy in 2002. And at least 275 health-care companies collapsed, putting thousands out of work and affecting thousands of patients.

National Century's collapse never gained much attention outside business circles, largely because it was a privately held company. But some, such as large pension funds and the state of Arizona, lost millions.

"I always say it's the largest, most significant case you've never heard of," said Kathy Patrick, an Arizona attorney representing 30 clients who lost a total of $1.6 billion.
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Ayers, Parrett and Poulsen founded National Century in 1991 to offer financing to small hospitals, clinics, nursing homes and other health-care providers.

National Century agreed to buy the providers' uncollected debt owed by patients, or accounts receivable, and give the providers cash to cover expenses. The smaller companies didn't have to wait for insurance reimbursement, and National Century kept a fee or percentage of what it collected.

To get cash to give the smaller companies, National Century sold bonds to investors -- including some big pension funds, which were among those hit hardest by National Century's collapse.

The pension fund for New York City police, firefighters and other workers began investing in National Century in 2000. The company's bonds were attractive because of their life span -- usually three years -- and high bond rating, said New York lawyer Steve Fineman.

But within two years, and only a year after the Sept. 11 terrorist attack, the New York City workers' fund lost $89 million.

lots more...
http://dispatch.com/live/content/local_news/stories/2008/02/03/poulsen.ART_ART_02-03-08_A1_PH97M78.html?sid=101

summary of people standing trial
http://www.dispatch.com/live/content/local_news/stories/2008/02/03/fraud.html