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March 6 (EIRNS)--ALLEGED CRIME GROUP RUNS DC GENERAL TAKEOVER. By the evidence given in lawsuits filed by hospitals and other of its victims, National Century Financial Enterprises (NCFE) is amassing a fortune stolen from health care institutions through classic gangster methods of embezzlement and fraud.
NCFE is part-owner, financier, operations partner and apparently the real beneficiary of Doctors Community Healthcare Corporation, which bought Greater Southeast Hospital in D.C. in a bankruptcy sale, and is preparing to take over and shut down D.C. General.
Lawsuits filed in Boston and Louisville (KY), and two separate cases in North Carolnia, charge NCFE with massive, systematic racketeering and fraud in the looting of hospitals and health care organizations.
James Cotto, a forensic accountant and former longtime U.S. investigator, filed a Feb. 15, 2001 affidavit in Boston Regional Medical Center's Federal racketeering suit against NCFE and against Doctors Community Healthcare Corporation chief executive Paul Tuft. After NCFE took over management of the hospital, they stole $12 million, Cotto explained, by illegally transferring money to their accounts, beginning with $8,000, as follows:
"NCFE made two small withdrawals at the start of the relationship [with the hospital], waited eight months, and then began making large weekly withdrawals.... Based on my experience in fraud investigations, this pattern of first making small withdrawals, which could be explained as an error if challenged, and then making a larger withdrawal once the first passed, waiting a period to see if it is noticed, and then proceeding to make multiple, large withdrawals once unchallenged, is common to embezzlement and fraud schemes."
The looted Boston hospital is asking the U.S. Court to seize NCFE's accounts before the money disappears.
The North Carolina-based PhyAmerica Physician Group, which manages emergency rooms for about 270 U.S. hospitals, was similarly looted and destroyed. A class-action Federal RICO suit charges NCFE with "a pattern of racketeering," filing false reports with the Securities and Exchange Commission, and embezzling milions from the health-care company, while conspiring with PhyAmerica's chief executive to bail him out of failure by letting him steal millions.
In a Louisville fraud and racketeering case, NCFE allegedly looted a failing subsidiary of Hospital and Home Care Management by getting executives to sell assets to NCFE for less than market value, committing multiple acts of wire fraud and mail fraud.
In the classic racket, gangsters would buy at a drastic reduction the debts owed to failing companies, then use strong-arm methods to collect the full debts. NCFE claims to pay 97 cents on the dollar for accounts-receivable -- but then, apparently, takes the lion's share out of the institution it has taken over.
NCFE is based in Ohio, but has a second main office in Scottsdale, Arizona, home of its corporate partner and apparent front, the heavily-indebted Doctors Community Healthcare Corporation. [ahc]
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