The former CEO of American Senior Communities and three others have been indicted for their alleged roles in a $16 million fraud, kickback and money-laundering scheme, U.S. Attorney Josh J. Minkler announced Wednesday.
The 32-count indictment accuses former CEO James Burkhart, former Chief Operating Officer Daniel Benson, Burkhart friend and associate Steven Ganote and Burkhart’s brother, Joshua, 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 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. 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. 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.
The defendants’ actions allegedly capitalized on ASC’s need for landscaping and pharmacy services; nurse call systems; food, medical and office supplies; patient/resident lifts and therapies; interior decorations and furniture; scent products, American flags; discharge packages; uniforms; and Alzheimer’s Memory Walk t-shirts, according to the government.
James Burkart’s home in Carmel, IN, originally was raided by the FBI in September 2015. Days later, ASC fired him. Benson was fired, and Chief Financial Officer Roger Werner resigned, in October 2015.
Each of the four men indicted 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. If convicted, they each face up to 20 years in prison for the conspiracy counts; 20 years in prison for each fraud count; 20 years in prison for certain money laundering counts; and 10 years in prison for other money laundering counts.
Additionally, James Burkhart, Benson and Ganote are charged with one count of conspiracy to violate the federal Anti-Kickback Statute. If convicted, they each face up to 5 years in prison for conspiracy to violate the statute.
ASC, in a statement released Wednesday, said it will continue to cooperate with federal agencies until the investigation related to the “betrayal of trust by two of its former officers” is concluded.
“ASC has emerged from this process a stronger, more vital organization,” the statement said. “ASC has implemented many safeguards, and strengthened the organization with new leadership under the direction of CEO Donna Kelsey.”
ASC serves older adults at more than 90 locations offering independent living, assisted living, memory care, skilled nursing, hospice and other services.