Texas Man Pleads Guilty to Over $9.5 Million Fraud Scheme
Conspirators Impersonated Cerner Corporation
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Texas man pleaded guilty in federal court today to his role in an elaborate, multi-million-dollar fraud scheme in which conspirators impersonated North Kansas City-based Cerner Corporation in a series of business and legal activities.
Albert Davis, 56, of Richardson, Texas, pleaded guilty before U.S. Chief District Judge Greg Kays to participating in a conspiracy to commit wire fraud.
By pleading guilty today, Davis admitted that he was the leader of a conspiracy to commit wire fraud in which more than 10 victims suffered losses exceeding $9.5 million from Aug. 25, 2008, to Feb. 19, 2015. Conspirators engaged in a scheme to use Cerner Corporation’s reputation and standing in the medical field to manipulate business transactions and court proceedings in their favor.
Davis is the fifth defendant to plead guilty. Co-defendants David Hernon, 55, of Fishers, Ind. (formerly of Richardson, Texas), David Tayce, 67, of Lucas, Texas, and Richard Bryant, 41, and his wife, Christina Bryant, 41, both of Sachse, Texas, have also pleaded guilty to their roles in the conspiracy.
In order to impersonate Cerner Corporation, Davis and his co-conspirators created a fake Cerner business entity for a similarly-named company, Cerner, LLC. Conspirators opened a fake Cerner bank account, registered a fake Cerner Internet domain and leased virtual office space for a fake Cerner address in Kansas City, Mo. They created fictitious employees from Cerner Corporation – including both fictitious identities and impersonating actual employees – to communicate with others. Conspirators fabricated documents, price quotes, agreements and invoices, which were all made to appear to be authentic Cerner Corporation documents, when they were not.
For example, conspirators sent e-mails to doctors at Summit Medical Center in Oklahoma, which falsely represented Cerner Corporation in negotiations by containing a quote for the sale of a MRI to Summit Medical Center. Conspirators also created fraudulent invoices for the sale of an MRI to Dallas Medical Center.
Davis also admitted that conspirators provided false and misleading information and testimony during the litigation of several lawsuits. The false and misleading testimony was regarding business deals where the conspirators had impersonated Cerner Corporation.
For example, Davis received a jury award of $24 million following the 2014 trial in LBDS Holding Company, LLC v. ISOL Technology, Inc., et al., Case No. 6:11-CV-428-LED, in the Eastern District of Texas. When the fraud was discovered, attorneys for ISOL Technology filed an emergency motion for sanctions against LBDS (Davis’s company). Davis admitted that similar false and misleading testimony was provided by conspirators in iHeart Care DMC Holdings, LLC. v. Dallas Medical Center, LLC., et al., Cause No. 13-09460, in Dallas County, Texas; and Alice George, et al., v. Albert Davis, et al., Case No. 3:13-CV-03058-PKH, in the Western District of Arkansas.
In addition to impersonating Cerner Corporation, Davis admitted, conspirators used additional e-mail accounts to impersonate business entities and physicians in order to send communications designed to manipulate others in business transactions.
For example, conspirators forged signatures and misled doctors into guaranteeing over $8 million in loans from Community Trust Bank in Texas. Davis admitted that he and his co-conspirators fraudulently obtained five individual loans from Community Trust Bank.
Conspirators also impersonated bondholders in order to file an involuntary bankruptcy petition against their own company, CMI Holding Company, Inc., in Case no. 10-38011-SGJ-7, in the Northern District of Texas. Conspirators continued to impersonate those bondholders throughout the litigation in phone calls and email communications, and by signing as the bondholders in a settlement agreement. Davis and his co-conspirators concealed their ownership of Eureka Group, LLC and used that entity to receive and disburse the monies received from the $1.8 million settlement of the involuntary bankruptcy.
Additionally, Davis admitted, conspirators solicited investments using fabricated communications and documents from entities they created, including the entity created to impersonate Cerner Corporation. Those misrepresentations included false financial documents, altered MRI images and false claims that used MRI systems were newly developed technology.
This case is being prosecuted by Assistant U.S. Attorney Matthew P. Wolesky, in cooperation with Assistant U.S. Attorney Nathaniel Kummerfeld of the Eastern District of Texas and Assistant U.S. Attorney Kimberly Davis of the Western District of Arkansas. It was investigated by the FBI.