Feds want 12+ years in prison for ex-CEO of senior living network over $20M kickback scheme

Federal prosecutors are recommending a 12-year prison sentence for James Burkhart, the former CEO of Indianapolis-based American Senior Communities, for his role in a $20 million healthcare fraud scheme, according to the Indianapolis Star.

Mr. Burkhart and three others — Daniel Benson, the former COO of American Senior Communities; Steven Ganote. an associate; and Joshua Burkhart, Mr. Burkhart's younger brother — were indicted in October 2016. Together, they faced 32 charges including conspiracy to commit mail, wire and healthcare fraud; conspiracy to violate the Anti-Kickback Statute; and money laundering.

The four were accused of creating 20 shell companies to falsify and inflate costs to American Senior Communities as well as the Health & Hospital Corp. of Marion County, the public health department that operates several Indianapolis hospitals. The four individuals allegedly then stole the discounts and rebates that belonged to the two entities and used them to live a "lavish lifestyle." The shell companies were also used to hide sizable kickbacks, according to court documents.

Altogether, the four defrauded the two healthcare companies and Medicare and Medicaid out of $20 million.

Prosecutors claim the defendants' goal with the scheme was to "solicit, receive and conceal kickbacks and other payments for their personal benefit" and that "this was not a one-time failure of conscience or exercise in bad judgment," according to the Indianapolis Star.

Joshua Burkhart will plead guilty to conspiracy to commit mail, wire and health care fraud. James Burkhart, Mr. Ganote and Mr. Benson will plead guilty to conspiracy to commit mail, wire and health care fraud; money laundering; and conspiracy to violate the anti-kickback statute.

However, James Burkhart's attorney says a 12-year sentence for the former CEO is unfair because the financial harm was overestimated.

Mr. Burkhart's sentencing hearing is scheduled for June 29.

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