US marshals say Ohio woman obstructed search for fugitive sister in $1.9B corporate fraud case

US marshals arrest Ohio sister of fugitive ex-exec

COLUMBUS, Ohio — A woman whose sister fled after being convicted in a $1.9 billion corporate fraud scheme was arrested Friday on charges she impeded the government’s search for her sibling, federal authorities said.

Linda Case, 66, faces charges of obstruction of justice and making false statements after the arrest at her home in Grove City outside Columbus, said Cathy Jones, acting U.S. marshal for the southern district of Ohio. Each charge carries a maximum sentence of five years in prison.

Jones said Case lied to investigators about her knowledge of the whereabouts of Rebecca Parrett, former vice chairman of National Century Financial Enterprises, who has avoided a 25-year prison sentence on 13 counts of securities fraud, wire fraud and money laundering in a fraud case at the failed health care financing company.

Authorities said Case has been in regular contact with Parrett since at least 2008 and helped her avoid her sentencing hearing and prison term by giving her information that helped conceal her identity and location. A criminal complaint filed in U.S. District Court says the sisters had regular e-mail communication, often using code words or phrases, and says Case told at least one other person how to contact Parrett and to conceal the communication.

Parrett, 61, who was last known to have lived in Carefree, Ariz., is in Mexico, according to investigators. She disappeared in March 2008 following her conviction and was sentenced in absentia a year later.

The complaint says Case had indicated that she planned to move in a recreational vehicle to Mexico with her daughter and son-in-law and to return to Ohio for her mother. She said in a January e-mail to Parrett that “Valentines Day is our goal” for the drive.

Parrett’s son told investigators last week that Case told him Parrett was OK and that he would be seeing her again.

In September, Parrett advised her sister to “get a second mortgage for as much as you can…then just walk away from it,” according to e-mail excerpts printed in the information. “Anything you can get on credit now and walk away from later…just don’t let people know where you are going and what you are doing.”

Case faces a bond hearing Tuesday. She was being held in an undisclosed location by the U.S. Marshals Service and had no lawyer listed in court documents.

Getting closer to Parrett wasn’t the entire mission in arresting Case, said Supervisory Deputy U.S. Marshal Drew Shadwick.

“Linda Case committed a crime by herself … while obviously it’s related to Rebecca Parrett, it’s a crime unto itself. The investigation of Rebecca Parrett continues,” Shadwick said. “I would certainly hope that this would be a step in the right direction, and letting all her associates know that lying to federal officers is not going to be tolerated.”

Lance Poulsen, the founder of National Century, formerly based in Dublin in suburban Columbus, is serving a 30-year prison sentence in the case. Prosecutors have described it as the biggest fraud at a privately held company in the United States.

The FBI raided National Century offices in 2002, leading to the corporate fraud convictions of at least nine former executives.

At its height, the company employed more than 300 people, most of them in the Columbus area. Executives made millions, with Poulsen alone earning more than $9.1 million between 1996 and 2002, according to the government.

National Century offered financing to small hospitals, nursing homes and other health care providers by purchasing their accounts receivable, usually for 80 or 90 cents on the dollar, so they wouldn’t have to wait for insurance payments. National Century then collected the full amount of the payments.

The company raised the money to fund its business by selling bonds to investors. It declared bankruptcy in 2002 after the FBI raid.