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THE COLUMBUS DISPATCH
Monday, February 25, 2008 12:59 PM
By Jodi Andes
Defense attorneys took over questioning of a key government witness this morning in the National Century Financial Enterprises trial in U.S. District Court.
The first line of questioning suggested that former executive vice president Sherry Gibson had problems with alcohol and drugs and was a good liar.
“Alcohol issues plagued you throughout your employment at NCFE, didn’t they?” asked defense attorney Javier Armengau. “Didn’t employees frequently address alcohol issues with you?”
Gibson said she didn’t have an alcohol problem but started taking an antidepressant in July 2002.
While testifying for the prosecution last week, Gibson described how she presented information to those interested in investing in the health-care financing company. She admitted to having lied during those presentations by giving investors as little information as possible and by not telling them the company’s financial reports had been falsified.
Armengau questioned her credibility as a witness, asking if she was good at giving out false information.
Defense Attorney Fred Benton presented a statement from Gibson’s psychologist indicating she “ was compulsively driven to please people.”
Gibson said she didn’t remember the statement until he pointed out her defense attorney Terry Sherman had given it to the federal court before she was sentenced.
He also noted she worked extensively with the federal government. Gibson has given at least 46 statements to federal officials dealing with National Century, from the FBI and IRS to U.S. Postal officials. Transcribed, the interviews filled binders in two office boxes, that Benton kept stacked in front of him during his questioning.
Gibson is expected to continue on the stand Tuesday, with questioning from the remaining three defense attorneys.
Gibson served three years in federal prison after pleading guilty to conspiracy to commit securities fraud. As part of her plea bargain, she agreed to testify against the five executives on trial now.
Two of the company’s three founders, Rebecca S. Parrett and Donald H. Ayers, and former company executives James E. Dierker, Roger S. Faulkenberry and Randolph H. Speer are on trial on charges of fraud, securities fraud, wire fraud and money laundering.
The company’s third founder, Lance K. Poulsen, will be tried on 13 counts of fraud in August. A seventh National Century executive, James K. Happ, is scheduled for trial on fraud charges in October.
In 1991, Ayers, Parrett and Paulsen founded National Century to offer financing to small hospitals, clinics, nursing homes and other health-care providers.
National Century agreed to buy the providers’ debt, or accounts receivable, and give them cash to cover expenses. The smaller companies didn’t have to wait for insurance reimbursement, and National Century kept a fee or percentage of what was collected.
In 2002, the Dublin-based business filed for bankruptcy, and at least 275 health-care companies collapsed in its wake.