Sunday, November 15, 2015

Jackson Family's American Senior Communities Making Big Bucks From Deal With Health & Hospital Corporation

The IBJ's J.K. Wall has an interesting story in this week's edition on the Jackson family that owns American Senior Communities, whose principal executives' homes were raided a couple of months ago by the FBI. Jackson family members responded to the raid by firing its CEO, James Burkhardt, and its COO, Dan Benson, and taking back personal control of ASC, which is the largest nursing home chain in the state of Indiana.

Much of the story focuses on the Jackson family business dealings over the years and the mystery surrounding them. Wall was able to sit down with Jackson family members to discuss the ongoing issues with ASC, but he was not allowed to photograph them. The IBJ was last able to photograph Jackson family members in the late 1980s. They've been involved in a number of business ventures over the years, including Preston-Safeway grocery stores, oil and gas interests in North Dakota, grape farms in Arizona and various real estate developments, among other business ventures. They consider themselves to be devout Christians, who have set up a foundation with $15 million in assets to support their favorite causes. They've been one of the largest contributors to Eric Miller's Advance America, which has led the fight against gay marriage in Indiana.

The amount of federal dollars at stake for its nursing home chain in light of the ongoing investigation cannot be understated. Long-time Advance Indiana readers have learned how the Marion Co. Health & Hospital Corporation forged a scheme with ASC under which it acquires scores of nursing home licenses across the state for nursing home properties which are owned by ASC or related entities. A fiction is created that HHC is the owner of the nursing homes, which are actually operated and maintained by ASC, in order to receive significantly higher Medicaid reimbursement rates based on HHC's status as a county-owned hospital that's supposedly providing care to indigent residents. According to the IBJ, HHC has passed on $452 million from 2003 through 2014 to ASC and its related companies for rental, lease and management fees. Between 2008 and 2014, HHC has pocketed $667 million for pretending to own the nursing homes. It uses revenues, in part, to pay for the $750 million Eskenazi Hospital in Indianapolis. HHC sold the naming rights for the former Wishard Hospital to the Eskenazi family for making what essentially amounted to one year's payment on the long-term bonds HHC issued to finance the hospital.

Advance Indiana exclusively raised the issue with Deborah Daniels serving as a member of HHC's board. She and her law firm, Krieg DeVault, serve as legal counsel for Jackson family interests, including ASC, and it also simultaneously represented HHC for many years despite the obvious conflict of interest. Advance Indiana called for Daniels, a former federal prosecutor and sister of former Gov. Mitch Daniels, to resign from HHC's board following news of the federal investigation. Barnes & Thornburg, which now represents HHC, is also representing Burkhardt in the federal investigation of his role as CEO of ASC, another obvious conflict of interest. Nobody in our local news media has bothered to raise these issues with any of the parties because the rules that apply to the rest of us don't apply to them.

ASC's former CEO, James Burkhardt, is represented by Barnes & Thornburg's Larry Mackey. Federal investigators are rumored to be investigating allegations Burkhardt received illegal kickbacks from nursing home vendors. Mackey, the former federal prosecutor best known for prosecuted Oklahoma City bombing suspect, Timothy McVeigh, was the guy who intervened in the federal investigation of Ponzi schemer Tim Durham to undo an asset forfeiture order the local federal prosecutor's office had initially obtained against him. As a result of that action on Durham's behalf, the investors in Fair Finance were forced to hire their own counsel and seek the involuntary bankruptcy of the company in an effort to seek recovery of the more than $220 million Durham had embezzled from them. Years later, those same investors are now only receiving small checks representing a small fraction of what they invested in Fair Finance since the bankruptcy trustee did such a piss poor job recovering their stolen assets while billing millions for his legal work.


Josh said...

Ahhh, christian owned. This should explain the fed targetting even if there was no malfeasance.

Anonymous said...

Josh 10:52: give us a break. Better yet, go get a decaf at starbucks and conjure up some other faux christian outrage.

Flogger said...

HHC seems to be a in sense operating like the C.I.B. A quasi government entity dedicated to allowing profiteering for the chosen ones.

I suspect the various organs of state security and justice are playing musical chairs to figure out who the fall guy will be. The Big Fish will probably escape intact.