The former CEO of American Senior Communities and two others have agreed to plead guilty to some of the charges related to their alleged roles in a $16 million fraud, kickback and money-laundering scheme, according to indystar.com.
ASC, in a statement to the media, said it was “grateful for the efforts to bring justice in the legal case” and that the plea agreements strengthen the company’s resolve to maintain customer trust.
As McKnight’s Senior Living previously reported, James Burkhart, former Chief Operating Officer Daniel Benson, Burkhart friend and associate Steven Ganote and Burkhart’s brother, Joshua, were indicted in October 2016 following a September 2015 raid of James Burkart’s home in Carmel, IN, and other locations. Days later, ASC fired James Burkhart. Benson was fired, and Chief Financial Officer Roger Werner resigned, in October 2015.
Each of the four men indicted was charged with one count of conspiracy to commit mail, wire and healthcare fraud, along with multiple other counts of mail fraud, wire fraud and money laundering. Additionally, James Burkhart, Benson and Ganote were charged with one count of conspiracy to violate the federal Anti-Kickback Statute.
The men were accused of pocketing more than $16 million in kickbacks and fraudulent overcharges, which they allegedly spent on vacation homes, private plane flights, golf trips, jewelry, gold bullion, casino chips and political campaign contributions.
Between 2009 and 2015, according to the 32-count indictment, the four engaged in side deals with outside vendors for their own personal benefit, unbeknownst to, and at the expense of, Health & Hospital Corp. of Marion County (which owns 70 Indiana facilities that it pays ASC to manage) and ASC’s owners. Often, the indictment said, ASC and Health & Hospital Corp. intentionally were overcharged for products and services, and then the overcharges were funneled back to the men through a web of more than 20 shell companies. In other instances, according to the government, the vendors paid kickbacks to the men in exchange for doing business with ASC.
According to documents filed Dec. 22 in district court and cited by local media, James Burkhart has agreed to plead guilty to four courts and faces up to 45 years in prison. He also has agreed to pay millions in restitution.
“I am deeply sorry for having taken advantage of my relationships and positions for the sake of personal financial gain,” he said in a statement released to the media by the law firm representing him.
Benson has agreed to plead guilty to three counts and could face up to 45 years in prison. Ganote will plead guilty to three counts and could face up to 45 years in prison.
Joshua Burkhart previously agreed to plead guilty to one count and could face up to 20 years in prison.
Dave Mazanowski, founder of landscaping company Mainscape also previously agreed to plead guilty to one felony count of conspiracy to commit mail, wire and healthcare fraud in relation to the case. He resigned from his position with the company in October 2016, according to Mainscape.
In September, ASC sued both Burkharts, Benson, Ganote and Werner, alleging that they “systematically looted” the company of “tens of millions of dollars” over the course of seven years.
