The former CEO of American Senior Communities, an Indianapolis-based skilled nursing and rehabilitation provider, was sentenced June 29 to nine and a half years in prison for his role in a fraud, kickback and money laundering conspiracy, according to the Department of Justice.
Federal agents began their investigation into James Burkhart three years ago. In September 2015, agents executed search warrants of his residence and ASC office. About a year later, 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 by a federal grand jury. All of the defendants, including Mr. Burkhart, had pleaded guilty to federal felony charges by January 2018.
Mr. Burkhart and his co-conspirators were accused of creating shell companies that would inflate vendors’ bills and submit them to ASC as if the shell companies were the real vendors. He also caused vendors or shell companies to submit false bills to ASC for fictitious services that were never provided, and, in some cases, demanded vendors pay him kickbacks in exchange for allowing them to service ASC’s large number of facilities.
In addition, Mr. Burkhart had vendors inflate their bills to ASC, which he would pay with money from Health & Hospital Corp. of Marion County, the public health department that operates several Indianapolis hospitals. The vendors would allegedly kick the overage back to Mr. Burkhart and his co-conspirators.
According to the DOJ, Mr. Burkhart and his co-conspirators funneled nearly $19.4 million to themselves through the scheme. The majority of the funds came from Health & Hospital Corp. of Marion County.
Mr. Burkhart was sentenced to prison after pleading guilty to three felony offenses: conspiracy to commit fraud, conspiracy to violate the healthcare Anti-Kickback Statute and money laundering.