[Updated] SNF Operator Sues Former Execs Facing Fraud, Kickback Charges

A large skilled nursing and senior living provider in Indiana is taking several of its former executives to court amid federal charges stemming from their alleged involvement in a $16 million fraud, kickback, and money laundering scheme.

Former American Senior Communities (ASC) CEO James Burkhart and COO Daniel Benson were among a group that “systematically looted” the Indianapolis-based company’s coffers between 2008 and 2015, according to a complaint filed with the U.S. District Court of the Southern District of Indiana on Sept. 15.

In its lawsuit, the provider alleges the defendants “exploited ASC’s singular focus on providing first-class care to its patients to defraud the Company out of tens of millions of dollars” through means that violated the Racketeer Influence and Corrupt Organizations (RICO) Act.

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Federal prosecutors previously indicted former Burkhart and Benson on charges they took millions in kickbacks and fraudulent overcharges and spent it on vacation homes, private flights, vacations and other luxury goods.

Some of those excessive charges included $1.6 million on sporting events, over $140,000 in travel to China, and nearly $40,000 in political contributions, according to the lawsuit.

“American Senior Communities filed a civil lawsuit against Jim Burkhart, Dan Benson, Roger Werner and numerous companies owned in various combinations by these individuals involved in a long-term scheme to defraud ASC, Health and Hospital Corporation and the government that began in 2007 and culminated with an FBI investigation in September 2015,” ASC said in a statement. “The lawsuit seeks to recover losses and damages ASC sustained by virtue of the actions of Burkhart and the other defendants. Criminal proceedings against Burkhart and the other defendants continue, and ASC expects its complaint will be resolved after the criminal case concludes.”

Burkhart’s attorney has said his client is innocent.

“Mr. Burkhart intends to vigorously defend himself against claims by ASC or anyone else that he did anything to harm ASC, its owners, or residents of ASC facilities,” attorney Kathleen Matsoukas at Barnes & Thornburg told the Indianapolis Star, which first reported the lawsuit.

The company seeks damages, attorneys’ fees, and a jury trial.

ASC provides skilled nursing and senior housing at 94 locations throughout Indiana and Kentucky, according to its website.

Written by Tim Regan

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