Executives Indicted In Securities Fraud Scheme

FBI, Nov 16, 2006

WASHINGTON - A federal grand jury in Columbus, Ohio, has indicted seven former executives of National Century Financial Enterprises (NCFE) on charges of conspiring to defraud investors by lying to them and others about how the investors' funds would be used, diverting the funds, then hiding the shortfall by moving money back and forth between subsidiaries' bank accounts and creating phony reports and records to cover up the scheme, the Department of Justice announced.

The 60-count indictment charges conspiracy, securities fraud, wire fraud, mail fraud and money laundering. The indictment seeks approximately $2 billion in forfeiture of property involved in the money laundering conspiracy.

The indictment alleges that instead of using the investors' funds as they promised, the defendants diverted funds to, among other purposes, make unsecured advances and loans to healthcare companies owned by NCFE or its principal shareholders, Lance Poulsen, Rebecca Parrett and Don Ayers.

Named in the indictment are:

Lance K. Poulsen, the president, chairman and a director of NCFE since its inception in 1991. Poulsen was responsible for the overall marketing, funding and operation of NCFE and its subsidiaries. In addition, he was an officer, director and owner of at least six related entities. He is charged with conspiracy, securities fraud, wire fraud, mail fraud and money laundering charges.

Rebecca S. Parrett, a vice chairman, secretary, treasurer and an officer, director and owner of NCFE and certain of its affiliates. Parrett was responsible for providing instruction on disbursing funds, preparing reports for NCFE and other duties. She is charged with conspiracy, securities fraud, mail fraud, wire fraud and money laundering charges.

Donald H. Ayers, a vice chairman and chief operating officer for NCFE. Ayers is charged with conspiracy, securities fraud, mail fraud, wire fraud and money laundering charges.

Roger Faulkenberry, director of securitizations for NCFE from 1994 until December 2000. Faulkenberry served as the point of contact with the rating agencies responsible for evaluating the soundness of NCFE's investments. He is charged with conspiracy, securities fraud, wire fraud, mail fraud and money laundering charges.

Randolph H. Speer, chief financial officer and executive vice president for NCFE at various times. Speer is charged with conspiracy, securities fraud, wire fraud, mail fraud and money laundering charges.

James Dierker, vice president in charge of client development for NCFE from January 1999 until January 2001. Dierker is charged with conspiracy, mail fraud, wire fraud and money laundering charges.

Jon Beacham, director and vice president of securitizations from about January 2001 until November 2002. Beacham is charged with conspiracy, securities fraud, wire fraud, mail fraud and money laundering conspiracy.

"An exhaustive investigation by the FBI, IRS, Postal Inspectors and Immigration and Customs Enforcement agents found evidence that the company executives bilked investors by building a financial house of cards with deception, sleight-of-hand financing, and accounting misdeeds," said U.S. Attorney Lockhart.