One of the defendants in the alleged $16 million fraud, kickback and money-laundering scheme involving former executives of American Senior Communities has agreed to plead guilty to charges against him, according to the Indianapolis Business Journal, citing a federal court filing.
The decision by Dave Mazanowski, founder of landscaping company Mainscape, puts him in the position of possibly testifying against four others accused in the case.
The trials of former ASC CEO James Burkhart, former ASC Chief Operating Officer Dan Benson, Burkhart’s brother Joshua and Burkhart’s friend Steven Ganote are scheduled for June. Each is 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.
Mazanowski faces one felony count of conspiracy to commit mail, wire and healthcare fraud. His change-of-plea hearing and sentencing have been moved to November.
According to a 32-count indictment announced in October by the Department of Justice, James Burkhart and co-conspirators participated in side deals with several outside vendors for their own personal benefit between 2009 and 2015, unbeknownst to and at the expense of Health & Hospital Corp. of Marion (Indiana) County and ASC’s owners. (Health & Hospital Corp. owns 70 Indiana facilities that it pays ASC to manage.) These side deals often involved intentionally overcharging ASC and Health & Hospital Corp. for the products and services that vendors provided and then funneling the overcharged amounts back to themselves through shell companies, according to the U.S. Attorney’s Office for the Southern District of Indiana.
The indictment, for instance, alleges that James Burkhart directed Mainscape to artificially inflate its invoices to ASC by 45%. After James Burkhart had ASC pay the invoices, the landscaping vendor allegedly paid the 45% overcharge back to one of James Burkhart’s shell companies, which he then purportedly split with the landscaping vendor’s shell company.
False and inflated invoices through the landscaping vendor supposedly defrauded ASC and Health & Hospital out of more than $2.3 million, according to the indictment. Burkhart and the others reportedly used the money to pay for vacation homes, private plane flights, golf trips, jewelry, gold bullion, casino chips and political campaign contributions.
Mazanowski voluntarily resigned from Mainscape in October, according to the company’s president, Mark Forsythe.
Attorneys for Mazanowski and James Burkhart declined to comment to the media outlet.