The former CEO of American Senior Communities has filed a motion seeking to have thrown out his felony convictions for his role as the leader of a fraud scheme that was valued at $19.4 million by the federal government, the Indianapolis Business Journal reports.
James Burkhart was sentenced in late June to 9 1/2 years in prison for his part in what U.S. Attorney Josh J. Minkler described as a “massive fraud, kickback and money-laundering conspiracy” through which the senior living and long-term care company leader and others funneled money to themselves to fund luxury purchases over a six-year period.
Burkhart, now in prison, since has hired new attorneys, who filed a motion Dec. 20 claiming that his former lawyers had a “profound conflict of interest” that affected their defense of and counsel to Burkhart, because their firm also represented one of the companies affected by the scheme, Health & Hospital Corp. of Marion County, which pays ASC to manage dozens of facilities that it owns.
The U.S. Attorney’s Office has until Feb. 14 to respond to the motion. In a statement to McKnight’s Senior Living, ASC said the matter is for that office to address. “As the U.S. government has established, Burkhart orchestrated a massive fraud with several co-conspirators,” the statement said in part.
Burkhart’s sentencing was the culmination of a three-year federal investigation and prosecution that began when a vendor who had been asked to be part of the scheme reported it to the FBI. The former CEO pleaded guilty to three federal felony offenses: conspiracy to commit fraud, conspiracy to violate the healthcare anti-kickback statute, and money laundering.
Pleading guilty to various charges along with Burkhart were ASC Chief Operating Officer Daniel Benson, Burkhart friend and associate Steven Ganote, and Burkhart’s younger brother, Joshua.
Noting all of their guilty pleas, ASC said: “Jim Burkhart went to great lengths to conceal his criminal conduct from both ASC and HHC. ASC, HHC and the U.S. government were the victims of Burkhart’s fraudulent scheme.”
Between 2009 and 2015, according to the 2016 indictment, the four men engaged in side deals with outside vendors for their own personal benefit, unbeknownst to, and at the expense of, Health & Hospital Corp. and ASC’s owners. Often, the indictment said, ASC and Health & Hospital Corp. were intentionally 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 simply paid kickbacks to the men in exchange for doing business with ASC.
Dave Mazanowski, founder of vendor Mainscape, a landscaping company, agreed to plead guilty in 2016 to one felony count of conspiracy to commit mail, wire and healthcare fraud.