[00:00.0 - 00:03.7] James Burkhardt's conspiracy reaped nearly $19.4 million [00:03.7 - 00:07.2] in fraud and kickbacks, funding private jets, [00:07.2 - 00:11.3] vacation homes, diamond jewelry, and gold bars. [00:11.3 - 00:13.4] Press release Indianapolis B. [00:13.4 - 00:15.4] United States Attorney Josh J.
Minkler [00:15.4 - 00:17.8] today announced the sentencing of the former CEO [00:17.8 - 00:20.9] of American Senior Communities, AMESC, [00:20.9 - 00:23.1] in a massive fraud, kickback, [00:23.1 - 00:25.3] and money laundering conspiracy. [00:25.3 - 00:28.0] James Burkhardt, 53, of Carmel, [00:28.0 - 00:31.2] was sentenced to 114 months imprisonment [00:31.2 - 00:34.6] by U.S. District Court Judge Tonya Walton Pratt.
[00:34.6 - 00:38.2] In spite of receiving a salary of over $1 million, [00:38.2 - 00:41.3] Burkhardt abused his official position of trust [00:41.3 - 00:43.9] to steal taxpayer dollars intended to benefit [00:43.9 - 00:47.6] this community's sick, elderly, and mentally challenged, [00:47.6 - 00:48.8] said Minkler. [00:48.8 - 00:50.4] "'Because this thief was motivated [00:50.4 - 00:53.1] "'by nothing other than corruption and greed, [00:53.1 - 00:56.1] "'we sought a justifiably harsh sentence. [00:56.1 - 00:58.0] "'Hopefully the sound of the prison door [00:58.0 - 01:01.1] "'slamming shut on this 9.5-year sentence [01:01.1 - 01:02.6] "'will deter other officials [01:02.6 - 01:04.7] "'from the culture of corruption and greed [01:04.7 - 01:06.4] "'we see in this district.'" [01:06.4 - 01:09.4] Today's sentencing caps a three-year federal investigation [01:09.4 - 01:11.4] in prosecution of Burkhardt, [01:11.4 - 01:14.2] who was charged with ASC Chief Operating Officer [01:14.2 - 01:17.1] Daniel Benson, Burkhardt friend and associate [01:17.1 - 01:20.3] Stephen Gannotte, and Burkhardt's younger brother, [01:20.3 - 01:21.9] Joshua Burkhardt.
[01:21.9 - 01:25.4] In September 2015, federal agents executed search warrants [01:25.4 - 01:28.0] at Burkhardt's residence and ASC office, [01:28.0 - 01:29.8] among other locations. [01:29.8 - 01:33.3] By October 2016, a federal grand jury indicted Burkhardt [01:33.3 - 01:34.8] and his co-defendants. [01:34.8 - 01:37.8] And by January 2018, all of the defendants [01:37.8 - 01:40.8] had pleaded guilty to federal felony charges.
[01:40.8 - 01:43.1] For his part, Burkhardt pleaded guilty [01:43.1 - 01:45.4] to three federal felony offenses, [01:45.4 - 01:47.3] conspiracy to commit fraud, [01:47.3 - 01:51.5] conspiracy to violate the healthcare anti-kickback statute, [01:51.5 - 01:52.8] and money laundering. [01:52.9 - 01:55.0] All told, he and his co-conspirators [01:55.0 - 01:58.3] funneled nearly 19.4 million in fraud and kickbacks [01:58.3 - 02:01.0] to themselves through a web of shell companies. [02:01.0 - 02:02.8] The majority of the money they stole [02:02.8 - 02:04.9] came from the Health and Hospital Corporation [02:04.9 - 02:08.7] of Marion County, part of Indiana's public health system [02:08.7 - 02:10.7] and the operator of healthcare facilities [02:10.7 - 02:12.5] like Eskenazi Hospital.
[02:12.5 - 02:14.4] Burkhardt's fraud and kickback schemes, [02:14.4 - 02:16.2] which spanned nearly six years, [02:16.2 - 02:19.8] exploited numerous aspects of ASC's operations. [02:19.8 - 02:22.7] ASC is Indiana's largest nursing home chain. [02:23.5 - 02:25.8] It manages approximately 70 senior care facilities [02:25.8 - 02:27.2] throughout the state.
[02:27.2 - 02:28.7] And to run those nursing homes, [02:28.7 - 02:32.4] ASC purchases a wide variety of goods and services [02:32.4 - 02:34.3] provided by outside vendors. [02:34.3 - 02:36.7] The bulk of the money to pay those vendors' bills [02:36.7 - 02:38.6] comes from health and hospital. [02:38.6 - 02:41.7] Burkhardt used his position as ASC's CEO [02:41.7 - 02:46.0] to cut secret side deals with over a dozen of ASC's vendors.
[02:46.0 - 02:48.8] He dangled the golden carrot of the purchasing power [02:48.8 - 02:51.4] of the state's largest nursing home chain. [02:51.4 - 02:54.0] All they had to do was pay something back. [02:54.0 - 02:56.6] In some cases, Burkhardt had vendors [02:56.6 - 02:58.8] inflate their bills to ASC, [02:58.8 - 03:01.8] which Burkhardt would pay with health and hospital's money [03:01.8 - 03:04.6] and the vendor would kick the overage back to Burkhardt [03:04.6 - 03:06.7] and his co-conspirators.
[03:06.7 - 03:09.1] In other cases, he formed shell companies [03:09.1 - 03:12.4] that would inflate vendors' bills and submit them to ASC [03:12.4 - 03:15.6] as if the shell companies were the real vendor. [03:15.6 - 03:19.2] In still other cases, he caused vendors or shell companies [03:19.2 - 03:22.8] to submit completely false bills for fictitious services [03:22.8 - 03:24.5] that were never provided. [03:24.5 - 03:26.3] And finally, in some cases, [03:26.3 - 03:29.3] he simply demanded vendors to pay him kickbacks [03:29.3 - 03:31.9] in exchange for him allowing them to service ASC's [03:31.9 - 03:34.0] large number of facilities.
[03:34.0 - 03:37.7] This last category included home health and hospice care, [03:37.7 - 03:41.2] where Burkhardt received a kickback for each patient ASC [03:41.2 - 03:43.6] referred to Burkhardt's chosen home health [03:43.6 - 03:45.5] or hospice company. [03:45.5 - 03:48.5] Landscaping, electrical generators, [03:48.5 - 03:51.3] employee uniforms, patient gifts, [03:51.3 - 03:55.5] American flags, furniture, heating and air conditioning, [03:55.5 - 03:58.5] wound care creams, medical supplies, [03:58.5 - 04:03.2] air fresheners, speech therapy, pharmacy services, [04:03.2 - 04:07.3] food services, home health care, and hospice care. [04:07.3 - 04:09.6] Burkhardt concocted secret side deals [04:09.6 - 04:13.7] involving all of those aspects of ASC's operations.
[04:13.7 - 04:15.6] His motive was pure greed. [04:15.6 - 04:17.8] He was caught on tape telling an informant [04:17.9 - 04:19.6] in reference to one of his schemes [04:19.6 - 04:22.9] that netted him over $600,000 per year. [04:22.9 - 04:24.6] I ain't giving that up.
[04:24.6 - 04:27.8] It doesn't sound like much money, but it's money. [04:27.8 - 04:30.7] Over the six years, Burkhardt used the money he stole [04:30.7 - 04:33.7] to buy Lakefront Real Estate on Lake Wawassee, [04:33.8 - 04:38.9] golf vacations, trips to Las Vegas, political contributions, [04:38.9 - 04:42.3] diamond jewelry, gold coins, and gold bars. [04:42.3 - 04:45.2] In addition, Burkhart spent over $1.5 million [04:45.2 - 04:49.9] of other people's money on over 150 flights on private jets.
[04:49.9 - 04:52.8] As Burkhart told the informant, I'll get mine. [04:52.8 - 04:56.0] I always told you, I'll get mine one way or another. [04:56.0 - 04:58.9] That was true until 2015, when a vendor Burkhart tried [04:58.9 - 05:01.0] to ensnare went to the FBI.
[05:01.0 - 05:03.0] Burkhart and his co-conspirators had [05:03.0 - 05:06.2] asked the vendor to inflate his bills by 30% [05:06.2 - 05:08.9] and pay the overage to a shell company. [05:08.9 - 05:11.9] The vendor thought that did not sound right or ethical, [05:11.9 - 05:14.3] so he reported it to law enforcement. [05:14.3 - 05:16.5] What followed was an extensive investigation [05:16.5 - 05:20.2] involving multiple undercover informants, search warrants, [05:20.2 - 05:23.1] and a detailed analysis of numerous shell companies [05:23.1 - 05:26.0] and nearly 100 bank accounts, all of which [05:26.0 - 05:28.8] culminated in the indictments, guilty pleas, [05:28.8 - 05:31.8] and ultimately, today's sentencing of Burkhart [05:31.8 - 05:34.8] to 114 months in federal prison.
[05:34.8 - 05:36.6] This case was jointly investigated [05:36.6 - 05:40.3] by the Federal Bureau of Investigation, FBI, [05:40.3 - 05:42.0] the Internal Revenue Service, [05:42.0 - 05:46.4] Criminal Investigation Division, IRS CID, [05:46.4 - 05:48.9] and the Department of Health and Human Services, [05:48.9 - 05:52.8] Office of Inspector General, HHS-OHG. [05:52.8 - 05:54.8] This defendant was paid a large salary [05:54.8 - 05:56.8] and viewed as an industry leader, [05:56.8 - 05:59.4] but he chose to abuse his power and position [05:59.4 - 06:02.1] out of pure greed, said Grant Mendenhall, [06:02.1 - 06:05.8] special agent in charge of the FBI's Indianapolis division. [06:05.8 - 06:08.7] The FBI works diligently with partner agencies [06:08.7 - 06:11.3] to uncover and investigate corporate executives [06:11.3 - 06:14.9] who enrich themselves through kickbacks and theft.
[06:14.9 - 06:16.6] We applaud the concerned citizen [06:16.6 - 06:18.7] who brought this fraud to our attention, [06:18.7 - 06:21.1] and we encourage anyone else who wants to bring [06:21.1 - 06:24.9] these types of fraudulent behavior to light to contact us. [06:24.9 - 06:27.1] David Talcott, acting special agent [06:27.1 - 06:29.9] in charge of IRS criminal investigations, [06:29.9 - 06:32.2] Chicago field office said, [06:32.2 - 06:34.8] Burkhart's theft from the most vulnerable citizens [06:34.8 - 06:37.0] of our communities is sickening. [06:37.0 - 06:39.8] Taxpayers deserve honesty and integrity [06:39.8 - 06:41.2] from business leaders.
[06:41.2 - 06:44.7] IRS CI's thoroughness of the financial investigation [06:44.7 - 06:47.6] represents our commitment to protect [06:47.6 - 06:49.7] the taxpayers of this community. [06:49.7 - 06:51.6] Healthcare fraud is fueled by greed [06:51.6 - 06:53.3] and is perpetrated by criminals [06:53.3 - 06:55.4] with the intent of concealing their acts [06:55.4 - 06:59.4] and securing financial riches at the expense of taxpayers, [06:59.4 - 07:02.6] said Lamont Pugh III, special agent in charge, [07:02.6 - 07:05.1] US department of health and human services, [07:05.1 - 07:06.9] office of inspector general. [07:06.9 - 07:11.0] Mr.
Burkhart spun a web of deceit through side deals, [07:11.0 - 07:13.4] inflated invoices and shell companies [07:13.4 - 07:16.7] in order to pilfer funds from Medicare and Medicaid, [07:16.7 - 07:18.6] which ultimately led him to the doorstep [07:18.6 - 07:22.0] of law enforcement and prosecutorial authorities. [07:22.0 - 07:24.6] The OIG will continue to work with our federal, state [07:24.6 - 07:27.9] and local law enforcement partners to uncover these schemes [07:27.9 - 07:30.4] and hold those who execute them accountable. [07:30.4 - 07:33.0] I am eager to collaborate with other public offices [07:33.0 - 07:35.2] and agencies to stop fraudsters [07:35.2 - 07:37.2] from stealing money from Medicaid, [07:37.2 - 07:39.3] said attorney general Curtis Hill.
[07:39.3 - 07:42.9] This is a program intended to help people who truly need it. [07:42.9 - 07:45.2] We will stay vigilant in holding accountable [07:45.2 - 07:47.6] we all those who seek to build taxpayers [07:47.6 - 07:49.6] by misappropriating funds. [07:49.6 - 07:52.1] According to assistant US attorneys, Nick Linder [07:52.1 - 07:55.1] and Cindy Cho, who prosecuted the case, [07:55.1 - 07:58.5] the gold bars, gold coins and other assets seized [07:58.5 - 08:01.6] from Burkhart will be criminally forfeited.
[08:01.6 - 08:04.6] In addition, Burkhart must pay full restitution [08:04.6 - 08:07.0] and serve three years of supervised release [08:07.0 - 08:08.4] following his sentence. [08:08.4 - 08:10.1] Burkhart's co-defendants will be sentenced [08:10.1 - 08:12.1] on the following dates and times, [08:12.1 - 08:15.3] Daniel Benson on July 6th at nine o'clock a.m., [08:15.3 - 08:18.3] Steven Gnote on July 9th at nine o'clock a.m. [08:19.3 - 08:22.1] Joshua Burkhart on July 9th at two o'clock a.m.
[08:25.1 - 08:27.8] David Mazinowski on July 10th at two o'clock a.m. [08:27.8 - 08:31.8] In October, 2017, United States attorney Josh J. Minkler [08:31.8 - 08:34.0] announced a strategic plan designed to shape [08:34.0 - 08:36.1] and strengthen the district's response [08:36.1 - 08:38.8] to its most significant public safety challenges.
[08:38.8 - 08:42.1] This prosecution demonstrates the office's firm commitment [08:42.1 - 08:45.6] to prosecuting complex large-scale fraud schemes, [08:46.6 - 08:50.0] particularly those that exploit positions of trust. [08:50.0 - 08:52.3] See United States Attorney's Office, [08:52.3 - 08:56.9] Southern District of Indiana Strategic Plan 5.1 Source, [08:56.9 - 09:01.5] oig.gov, provided by Access Cloud Sync, [09:01.5 - 09:04.1] HIPAA compliant file sharing solution, [09:04.1 - 09:07.1] www.accesscloudsync.com.
