Two former executives with defunct healthcare lender National Century Financial Enterprises have been sentenced to prison. Donald Ayers, former vice chairman of NCFE, was sentenced by a federal judge to 15 years in prison, while NCFE's former CFO Randolph Speer was sentenced to 12 years. In theory, Ayers could have gotten 55 years and Speer up to 125 years under federal sentencing guidelines. In addition to receiving prison sentences, the two were ordered to repay billions of dollars to investors, along with three other co-defendants who haven't been sentenced yet.
Ayers and Speer were convicted for their roles in a $1.9 billion corporate fraud, which some have compared to the Enron and WorldCom debacles. NCFE bought accounts receivable from providers and sold securities to investors to finance the acquisitions. According to prosecutors, the company paid unrealistic amounts for the provider receivables, which then were used as a questionable ground for its securities (largely, it should be noted, with cooperation from Wall Street). When the NCFE collapsed in 2002, its failure led to the bankruptcy of about 275 providers.
Ultimately, Speer earned more than $1.2 million during his time with NCFE, and Ayers more than $7.4 million during their time with the company, which offered financing to small hospitals, nursing homes and other providers by buying their accounts receivable. The judge has ordered Ayers and Speer to pay restitution of $2.4 billion and forfeiture of another $1.8 billion.
To learn more about the case:
- read this Associated Press article
- read this Modern Healthcare article