Two NCFE Executives Get More than 10 Years in Prison, More Executives Face Sentencing Today

Two former National Century Financial Enterprises executives found guilty of fraud and money laundering were sentenced Wednesday to more than a decade in prison, according to a Columbus Dispatch report.

Federal Judge Algenon L. Marbley sentenced Donald H. Ayers – dubbed the architect of the fraud that lead to the demise of the health care financing company – to 15 years in prison. Ronald H. Speer received 12 years, the newspaper reported.

Ayers and Speer, the first to six former NCFE executives to be sentenced, were convicted in March of conspiracy to commit securities and wire fraud, money laundering, and conspiracy to commit money laundering (“Hospital Debt Buyers Convicted of Fraud and Money Laundering,” March 17). Roger S. Faulkenberry and James E. Dierker Jr., also convicted of fraud and money laundering charges, are expected to be sentenced Thursday in U.S. District Court in Columbus, Ohio. 

Friday Lance K. Poulsen, NCFE’s former chief executive, and his friend Karl A. Demmler, are expected to be sentenced in a related case. The two were convicted of trying to bribe a federal witness in Poulsen’s fraud trial, which is set for Oct. 1.

Rebecca S. Parrett, who prosecutors say was responsible for providing instruction on disbursing funds and preparing NCFE reports, fled after her conviction in March on related fraud charges and remains at large (“National Century Convict on the Run,” July 2,).

Founded in 1991, NCFE once provided financing to hospitals and other health care providers by buying their accounts receivable and issuing high investment grade securities backed by the purchases. The business model worked until 1998, when NCFE began loaning millions to health care providers where it had built an ownership stake, failed to formalize the loans, then juggled the money in various accounts to cover reserve shortfalls and lied to investors and others about their holdings. Prosecutors said investors lost more than $1.9 billion and 275 healthcare providers filed for bankruptcy following NCFE’s collapse.

In sentencing Ayers Wednesday, Judge Marbley stated, “Mr. Ayers, at the end of the day, it will be that your avarice, your arrogance and your hubris led to your downfall.”