Legal News

Lance Poulsen Has Time on His Side ? Lots and Lots of Time

By Ashby Jones

Question: What sentence do you give to the biggest fraud ever perpetrated at a privately held U.S.-based company?

Answer: 30 years.

At least that was the answer doled out by Algenon Marbley, a federal judge in Columbus, Ohio, on Friday. Marbley sentenced Lance Poulsen of National Century Financial Enterprises to 30 years in prison for his role in a $2.9 billion corporate fraud. Marbley said that Poulsen was “the architect of a fraud of such magnitude that it would make a sophisticated analyst shudder.” Click here for the AP report; here for the DOJ’s press release; here for more from the NYT’s Dealbook.

The sentence, according to the NYT, represents one of the longest white-collar sentences ever handed down.

National Century’s 2002 collapse hastened the bankruptcies of 275 hospitals, clinics and other healthcare providers, authorities say. Victims included Pacific Investment Management Co., the world’s largest bond fund. Pimco lost $283 million and Credit Suisse lost $257 million, prosecutors said.

Poulsen, 65, was convicted in October on 12 counts of securities fraud, wire fraud and money laundering. He declined Marbley’s offer to make a statement following his sentencing. He is already serving a 10-year sentence for trying to bribe the main witness against him in the case. His sentence will run concurrently with the sentence for witness tampering.

According to the NYT, Marbley's decision signals that federal judges could begin imposing harsher sentences for white-collar crime in response to the rise in public outrage over corporate fraud. The sentence for Poulsen exceeds the 25 years given to Worldcom’s Bernie Ebbers and the 24 years initially doled out to Enron’s Jeff Skilling.

Defense attorney Peter Anderson said Poulsen was disappointed and would appeal.

“We feel strongly that in this particular climate there is a strong likelihood of confusing business failures and assuming that the underlying cause is automatically criminal behavior,” he said.

Full post as published by Law Blog - WSJ.com on March 30, 2009 (boomark / email).