A U.S. District Court judge leaned closer to prosecuting attorneys’ recommendations than defense attorneys’ on Friday and sentenced former nursing home executive James Burkhart to 9½-years in prison before an overflow crowd in Indianapolis.
Prosecutors had asked for a 12½-year sentence, while attorneys for the former CEO of American Senior Communities had appealed for just a four-year term.
Burkhart was one of four men accused of conducting more than two dozen fraudulent arrangements and kickback schemes that netted more than $19 million. He pleaded guilty in December, two years after FBI raids of his office, safe deposit boxes and home uncovered 350 gold coins and gold bars, and more than $1 million cash. A vendor who refused to be shaken down tipped the FBI, which began a vast investigation, spanning numerous federal agencies.
The sentencing hearing was delayed about an hour on Friday when the size of the crowd became apparent. U.S. Judge Tanya Walton Pratt moved the sentencing to a different courtroom and officials provided a video feed to an overflow room.
Authorities deemed Burkhart the ringleader of the conspiracy. They said that over at least a six-year period, the accused— all of whom agreed to plea deals — used shell companies to falsify and inflate costs of goods and services, allowing them to steal discounts and rebates, and conceal kickbacks.
They lived lavishly, spending millions of dollars on sporting events, private flights and gift cards alone, authorities said. They were indicted on charges of defrauding American Senior Communities, the Medicare and Medicaid programs, the local county health department, a health foundation and others. As part of his punishment, Burkhart, who earned a salary of more than $1 million per year, is to pay full restitution.
Last September, ASC filed suit, accusing Burkhart, other former top executives and former vendors for “systematically looting” the long-term care provider from 2008 to 2015. Named in the lawsuit were Burkhart, the company’s former COO Daniel Benson, former CFO Roger Werner, Burkhart’s business associate Steven Ganote, and Burkhart’s brother Joshua Burkhart.
Burkhart was board chairman of the Indiana Health Care Association at the time of the FBI raids in September 2015. At the time, ASC operated nearly 100 skilled nursing, hospice and assisted living facilities in Indiana and Kentucky. Other company officials were quick to point out that the then-alleged criminal activities did not harm resident or patient care and were not affiliated with building operations.