30-Year Sentence for $1.9 Billion Fraud

A criminal case that prosecutors characterized as the Enron of health-care financing was supposed to have wrapped up a year ago, when a federal jury in Ohio convicted five National Century Financial Enterprises executives of conspiracy, fraud and money laundering.

Five months later, the court finished sentencing the people found guilty for the $1.9 billion fraud, handing out prison terms of 15, 12, 10, and 5 years.

One National Century executive avoided sentencing, however. Vice chairwoman, secretary, and treasurer Rebecca S. Parrett never showed up to be sentenced. After her conviction, she'd jumped bail and vanished.

At the same time today, Marbley ordered National Century's founder and CEO, Lance K. Poulsen, to federal prison for 30 years. Poulsen's sentence in the fraud had been delayed while he was tried for witness tampering in the case. He was convicted in that matter, too, and ordered to prison for 10 years, which he will serve concurrently with the fraud sentence.

National Century billed itself as a kind of health-care factor, buying accounts receivable from doctors, clinics, and hospitals at a discount, and trying to profit by collecting more than it paid.

It sold bonds to investors based on that premise, but trial testimony showed that millions of dollars actually went to unsecured loans made to companies owned or controlled by National Century executives.

When the company collapsed into bankruptcy in 2002, $1.9 billion had vanished, forcing the closure of hundreds of health-care companies to which National Century still owed money.

by Mark Stein