Saturday, October 31, 2020

Former CEO Sentenced to Prison in Kickback Scheme

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The former chief executive officer of American Senior Communities in Carmel was sentenced Friday in federal court after a three-year investigation.

U.S. Attorney Josh Minkler’s office says James Burkhart will serve more than nine years in prison for his role in a massive fraud, kickback, and money laundering conspiracy.

Minkler says Burkhart and his co-conspirators, including his younger brother, funneled more than $19 million in fraud and kickbacks to themselves through numerous shell companies and bank accounts. The majority of the money came from the Health & Hospital Corp. of Marion County, which is part of the state’s public health system.

“In spite of receiving a salary of over $1 million, Burkhart abused his official position of trust to steal tax payer dollars intended to benefit this community’s sick, elderly and mentally challenged,” Minkler said in a news release.

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“Because this thief was motivated by nothing other than corruption and greed, we sought a justifiably harsh sentence. Hopefully, the sound of the prison door slamming shut on this 9.5 year sentence will deter other officials from the culture of corruption and greed we see in this district.”

ASC is the largest nursing home chain in the state, managing about 70 senior care facilities. Minkler’s office says Burkhart would have vendors, from whom the company would purchase various goods and services, to inflate their bills to ASC, which Burkhart would pay with the Health & Hospital Corp.’s money.

The vendor would then kick the extra money back to Burkhart and his co-conspirators. In some cases, he would have vendors or shell companies submit false bills for services that were never provided or simply demand vendors pay him kickbacks in exchange for business with ASC.

The investigation began in 2015, when a vendor Burkhart tried to include in the scheme went to the FBI.

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“This defendant was paid a large salary and viewed as an industry leader, but he chose to abuse his power and position out of pure greed,” said Grant Mendenhall, special agent in charge of the FBI’s Indianapolis Division.

“The FBI works diligently with partner agencies to uncover and investigate corporate executives who enrich themselves through kickbacks and theft. We applaud the concerned citizen who brought this fraud to our attention, and we encourage anyone else who wants to bring these types of fraudulent behavior to light to contact us.”

His co-defendants include ASC Chief Operating Office Daniel Benson, Burkhart’s younger brother Joshua Burkhart, and Steven Ganote, a friend and associate of Burkhart. Each of them will be sentenced over the next two weeks.

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