3/6/08 Exec defends his limited understanding of National Century
The only National Century Financial Enterprises executive to testify in the fraud trial involving him and four co-workers underwent heavy questioning Thursday from Justice Department lawyers, who suggested he knew more about the company's operations than he told jurors earlier in the day.
James Dierker, once vice president of marketing at Dublin-based National Century, testified earlier that he considered himself a small cog in a large machine at the company and was responsible for marketing, client development and little else. Dierker refuted testimony from a government witness who earlier in the month-long trial alleged he withheld knowledge from investors of ongoing fraud at the company.
The government has charged Dierker, 40, with two counts of concealing money laundering and a count each of conspiracy and money laundering conspiracy in connection with National Century's 2002 bankruptcy. He has been on trial in U.S. District Court in Columbus with former executives Rebecca Parrett, Donald Ayers, Roger Faulkenberry and Randolph Speer. They have all denied the charges.
During the government's questioning of Dierker, Assistant U.S. Attorney Kathleen McGovern probed about how much he knew of the company's finances.
Noting how Dierker climbed National Century's corporate ladder quickly and how his salary nearly tripled during his tenure at the health-care financing business, McGovern asked about his knowledge of the company's operations.
When McGovern asked whether he was telling jurors he didn't know how National Century operated, Dierker replied that he had a specific understanding of how of his departments worked but only a general knowledge of the business' other departments.
McGovern also asked Dierker about why he left the company in the fall of 2002, suggesting he may have known the company would collapse and file for bankruptcy that October. In addition to family-related reasons, Dierker said he left because he was concerned about an overdue audit on the firm.
Deloitte & Touche was scheduled to deliver an audit of National Century's books in March 2002 but it wasn't completed by June. Dierker said he read a letter from Deloitte that indicated the audit might never be finished because it needed scores of additional documents from the company. Dierker said he asked National Century CEO Lance Poulsen about the letter and became frustrated with Poulsen's seeming lack of urgency about the audit and its delay.
McGovern also spent a good deal of her cross examination asking Dierker about the overfunding of health-care clients. The government has alleged the executives allowed National Century to overfund certain medical businesses that were owned by National Century's principals - Poulsen, Parrett and Ayers - by hundreds of millions of dollars. That allowed the principals to enrich themselves, Justice Department lawyers have claimed.
National Century was a financier for health-care providers, buying medical firms' receivables at a discount and packaging them as asset-backed bonds for sale to investors.
Dierker said he heard claims of overfunding during his time at National Century, but added that he when he checked those claims he found they were false.
http://www.bizjournals.com/columbus/stories/2008/03/03/daily35.htmllink to previous articles...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3212130&mesg_id=3212233