The former CFO of National Century Financial Enterprises was sentenced to 12 years in prison for his role in a fraud widely compared to those at Enron and WorldCom.
Randolph Speer, who served as chief financial officer from 1999 to 2002, received concurrent sentences of 12 years for money laundering, and five years for securities and wire fraud, according to Bloomberg. He faced a maximum of 125 years in prison.
Donald Ayers, co-founder, and former vice chairman and chief operating officer of the health care financing company, was sentenced to 15 years in prison for his role in bilking investors out of $2.9 billion before the company went bankrupt in 2002, according to the report.
“This company was a poster child for a sophisticated scheme,” U.S. District Judge Algenon Marbley reportedly said before she imposed the sentences in her Columbus, Ohio, courtroom. “It was a high-level shell game. Everyone knew, but they were hedging their bets that they wouldn’t be discovered. But they were.”
In March, a federal jury found Speer, Ayers and three others former executives guilty on all counts of conspiracy, fraud, and money laundering at National Century.
A 27-count indictment against the group laid out the defendants’ scheme to deceive investors about the financial health of NCFE. The company’s main business was securitized medical accounts receivable purchased from medical providers. The indictment also accused the defendants of lying about how investors’ funds would be used, diverting the funds, hiding the shortfall by moving money back and forth between subsidiaries’ bank accounts, and falsifying reports and records to cover up the scheme.
Other parties found guilty are Rebecca Parrett, vice chairman and treasurer, who has since fled and whose whereabouts are unknown; Roger Faulkenberry, a senior executive responsible for raising money from investors; and James Dierker, associate director of marketing and vice president of client development. They face maximum prison terms ranging from 55 years to 140 years. Faulkenberry and Dierker are scheduled to be sentenced on Thursday.
Speer, Ayers and Faulkenberry have been in jail since April after prosecutors uncovered a plot to flee to Aruba, according to Bloomberg. It said Dierker was released on house arrest. On March 27, Parrett, who was once married to Ayers, failed to report for an electronic ankle bracelet to monitor her movements.
Before his sentencing, Speer’s wife, Kathy, testified that her husband of 20 years was “soft-spoken and down to earth,” according to the Bloomberg report. “He is the center of my family,” she told the court. “His absence from home has been absolutely devastating to our family.”
In addition to the five individuals who were convicted on Wedensday, other former executives who were indicted include CEO Lance Poulsen, vice president of securitizations Jon Beacham, and James Happ, who was executive vice president for service operations and a certified public accountant.
Beacham pleaded guilty in 2007 to one count of conspiracy to commit securities fraud and wire fraud and one count of securities fraud, and agreed to forfeit $330,000. Poulsen was scheduled to go to trial this month on fraud charges. In March, a jury convicted Poulsen and his friend, Karl A. Demmler, of obstruction of justice, conspiracy and two counts of witness tampering, according to The Columbus Dispatch.