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Friday, August 8, 2008
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Former National Century Financial Enterprises CEO Sentenced to Ten Years in Prison on Conspiracy, Witness Tampering and Obstruction of Justice Charges

WASHINGTON - Lance K. Poulsen, the former chief executive officer of National Century Financial Enterprises (NCFE), was sentenced in U.S. District Court in Columbus, Ohio, today to ten years in prison for conspiring to interfere with a witness who was preparing to testify in the fraud trial against Poulsen and other NCFE executives involved in a $3 billon securities fraud scheme, announced Acting Assistant Attorney General Matthew Friedrich, U.S. Attorney Gregory G. Lockhart for the Southern District of Ohio and Keith L. Bennett, Special Agent-in-Charge of the FBI’s Cincinnati Field Division.

U.S. District Court Judge Algenon L. Marbley also fined Poulsen $17,500 as part of the sentence. Poulsen, 65, and his personal associate, Karl A. Demmler, 57, of Columbus were arrested Oct. 17, 2007, and later charged in a four-count indictment alleging that they conspired to impede the testimony of Sherry Gibson, a key witness in the securities fraud trial against Poulsen and other NCFE executives. A federal jury convicted Poulsen and Demmler on all counts on March 26, 2008, after a week-long trial. Poulsen, along with seven other NCFE executives, was indicted in July 2007 for their roles in a scheme to deceive investors about the financial health of NCFE. Five of the defendants were found guilty on all counts of the indictment in March 2008.

During the trial, the jury heard audio recordings of meetings that took place over a period of months between Demmler and Gibson and more than two months of intercepted wire communications between Poulsen and Demmler. The recordings revealed that the defendants offered Gibson money to lie and attempted to influence her testimony at the NCFE fraud trial. According to the recordings presented at trial, Demmler offered Gibson money if she would have "memory lapses" when she testified against Poulsen. The jury also heard tapes of conversations between Poulsen and Demmler discussing ways to keep the witness from testifying.

Poulsen was president, chairman, chief executive officer and an owner of Dublin, Ohio-based NCFE, one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.

After the witness tampering indictment was returned, Poulsen’s fraud trial was severed from the other NCFE defendants. Poulsen will face the fraud charges at trial scheduled to begin Oct. 1, 2008. Demmler's sentencing date has not yet been set. Both men have been in custody since their arrests.

The case is being prosecuted by Assistant U.S. Attorney Doug Squires and Trial Attorneys Leo Wise and Nathan Dimock of the Criminal Division’s Fraud Section. The case was investigated by the FBI.