NCFE Founder Poulsen Guilty in Bribery Trial

The former chief executive of healthcare debt buyer National Century Financial Enterprises was convicted yesterday in federal court of trying to bribe a witness in his upcoming fraud trial.

Jurors took less than a day to find Lance K. Poulsen and his friend Karl A Demmler guilty of witness tampering, conspiracy and obstruction of justice for trying to pay Sherry Gibson, a former NCFE executive, to change her testimony. Prosecutors said Poulsen used Demmler as a go-between in an attempt to bribe Gibson. As evidence, the government played tapes made from a series of recorded meetings between Demmler and Gibson, along with intercepted wire conversations between Demmler and Poulsen.

“For our system of justice to function effectively, the public must be able to trust that witnesses and jurors will be free from tampering by defendants,” Assistant Attorney General Alice S. Fisher of the Criminal Division said in a press release.

Ten days ago, a federal jury in U.S. District Court in Columbus, Ohio also took less than a day to convict five other NCFE executives of wire fraud, securities fraud, money laundering and conspiracy in a case the U.S. Department of Justice likened to the Enron and WorldCom scandals ("Hospital Debt Buyers Convicted of Fraud and Money Laundering," March 17). Gibson, the government’s key witness in both cases, pled guilty to fraud charges in 2003 and has already served three years in prison. Yesterday’s verdict brings the number of NCFE executives who have pled guilty or been convicted of charges related to NCFE’s demise to 10.

Poulsen and Demmler each face a maximum of 35 years and fines of up to $250,000 on each of the four counts. Poulsen’s trial on fraud charges related to NCFE’s collapse is scheduled to begin in August.

"August is a new day. It's a new trial," Poulsen's attorney, William R. Terpening, told the Columbus Dispatch.

Prosecutors say Poulsen, who co-founded NCFE, masterminded the scheme to deceive investors about the company’s financial health and the use of their funds. NCFE went bankrupt in 2002 after an FBI raid. Investors lost more than $1.9 billion and 275 healthcare providers filed for bankruptcy following NCFE’s collapse.