COLUMBUS, Ohio (AP) - Before Lance Poulsen can fight charges that he was
the mastermind behind a $1.9 billion fraud scheme, the former CEO of National
Century Financial must first deal with allegations that he proposed paying a
government witness $500,000 to lie on the stand.
The federal witness tampering trial of the former owner of National Century,
a health care financing company, was scheduled to begin Monday. Once that trial
ends, Poulsen faces a second trial in August on multiple counts of conspiracy,
wire and securities fraud and money laundering.
Five former executives at National Century were convicted of similar charges
on Thursday in a fraud scheme that prosecutors likened to the cases of Enron and
WorldCom.
In the tampering case, prosecutors say that Poulsen along with Karl Demmler,
the owner of a Columbus bar and restaurant, teamed up to persuade the witness to
help Poulsen beat the charges.
"It's not what you make up, it's what you forget," Demmler allegedly told
the witness during a meeting on July 13 in Columbus, according to the FBI's
criminal complaint.
During a July 18 meeting, "Demmler suggested Witness A have 'amnesia,'"
according to the complaint. Poulsen told Demmler during a Sept. 28 phone call
that one of the best things the witness could say was that she was unfamiliar
with the indictment and charges against Poulsen.
Messages seeking comment were left for attorneys for Poulsen and Demmler.
Neither the complaint nor the Oct. 23 indictment identify the witness, but
the government's 162-item exhibit list refers frequently to meetings between
Demmler and Sherry Gibson, a former National Century executive vice president
who pleaded guilty in 2003 to securities fraud in exchange for helping
prosecutors.
Those meetings match the dates of Demmler's meeting with the witness in the
criminal complaint. Gibson is expected to testify for the government, U.S.
Attorney's office spokesman Fred Alverson said.
Gibson's attorney, Columbus lawyer Terry Sherman, said he continues to
represent Gibson and that he is not involved in the witness tampering trial.
Gibson was the prosecution's star witness at the trial of the five former
executives that concluded Thursday. She testified the company kept two sets of
books, one for public consumption filled with false information and another that
showed the firm's actual shortfalls.
She was not charged in the current witness tampering case.
National Century, based in suburban Dublin, offered financing to small
hospitals, nursing homes and other health care providers by purchasing their
debt. The government alleges the company also gave those providers unsecured
loans, then lied to investors about those loans.
The government says company officials moved money between accounts to cover
shortfalls, fabricated data and loaded false information on a company computer
system.
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