Two former executives with a company that operates dozens of Indiana nursing homes have agreed to plead guilty in a kickback scheme involving millions of dollars.
Court documents unsealed this week show that former American Senior Communities CEO James Burkhart and former Chief Operating Officer Daniel Benson, both 52, have reached plea deals.
They were indicted in 2016, along with associates Steven Ganote, 43, and Joshua Burkhart, who have also reached plea deals. Joshua is James Burkhart's younger brother.
Prosecutors say the men took part in a kickback scheme between January 2009 and September 2015 that netted them $16 million.
James Burkhart, Benson and Ganote will plead guilty to charges that include money laundering and conspiracy to commit mail, wire and health care fraud.
Joshua Burkhart, 43, will plead guilty to conspiracy to commit mail, wire and health care fraud.
The U.S. Attorney’s Office in October 2016 unsealed a 32-count indictment alleging that the Burkharts, Benson and Ganote used shell companies and inflated invoices to enrich themselves from 2009 through the fall of 2015.
The victims of the fraud were Indianapolis-based ASC, which is owned by the Jackson family of Indianapolis; the Health & Hospital Corporation of Marion County, which hired ASC to operate its nearly 70 nursing homes; and federal health care programs, the indictment alleged.
The same day that indictments were unsealed, prosecutors separately announced a single felony charge against David Mazanowski, founder of the Fishers-based landscaping firm Mainscape Inc., who was accused of overbilling ASC and then splitting the spoils of the fraud with his co-conspirators.
According to Joshua’s plea agreement, James Burkhart told his brother around 2009 that he wanted to provide him opportunities to earn more money. That year, Joshua began receiving monthly checks for thousands of dollars from Mainscape, ostensibly as consulting fees, though prosecutors said he didn’t do any work for the money.
Around the same period, Benson approached Joshua about purchasing American flags from him, for distribution to ASC nursing homes, even though Joshua had never been in the flag business. The plea agreement says Benson told him how much to charge, which gave him a robust profit compared with what he paid the flag distributor.
When Joshua worked with ASC employees on flag purchases, he concealed his relationship to the CEO by using the name Justin Barnes, the filing says.
It says Joshua’s ill-gotten gains from the Mainscape and flag schemes totaled more than $250,000 but less than $550,000.
A sentencing date has not been set.