4 men charged in scheme to defraud millions from American Senior Communities to plead guilty

INDIANAPOLIS, Ind. – Four men indicted in a massive scheme to defraud American Senior Communities will plead guilty in the case, according to court documents filed this week.

Former CEO James Burkhart, ex-ASC COO Daniel Benson, contractor Steven Ganote and Burkhart’s brother, Joshua Burkhart, were all charged last year in connection with the scheme, which included massive fraud and kickbacks totaling more than $16 million.

The federal probe uncovered a complex series of billings and agreements stretching back to early 2009 that involved charging inflated prices for services and pocketing the excess money. The accused conspirators used the money to pay for vacation property, Rolex watches, private planes and more. They funneled the money through 20 shell companies, according to the federal indictment.

Charges in the case included mail fraud, wire fraud, money laundering and conspiracy. There were a total of 32 counts.

James Burkhart

According to court documents filed this week, James Burkhart will plead guilty to conspiracy to commit mail, wire and health care fraud; conspiracy to violate the anti-kickback statute; and money laundering.

The first charge carries a maximum sentence of up to 20 years in prison and a fine in excess of $250,000 or twice the gross gain or loss from the offense plus 3 years of supervised release. The conspiracy count carries a maximum sentence of 5 years plus a $25,000 fine and 3 years of supervised released. The money laundering charge carries a maximum penalty of 20 years in prison, a $500,000 fine or twice the value of the property involved in the transaction, whichever is greater, and 3 years of supervised released.

Seventeen other counts against him would be dismissed in exchange for his guilty plea. Burkhart was fired in 2015 after the FBI conducted a large-scale raid at his home and office.

In a statement released through his law firm, Barnes & Thornburg, Burkhart confirmed his guilty plea and said he received "illegal payments from various suppliers of products and services to American Senior Communities":

“I accept responsibility today for criminal actions I took while I served as CEO of American Senior Communities. I am deeply sorry for having taken advantage of my relationships and positions for the sake of personal financial gain.”

His attorney, Kathleen Matsoukas, also released a statement regarding Burkhart's plea:

“The care of ASC residents was always Mr. Burkhart’s top priority and their well-being was never put at risk by his financial crimes. As part of his agreement with the U.S. Attorney’s Office, Mr. Burkhart will surrender several million dollars for restitution to affected parties.”

Benson will plead guilty to conspiracy to commit mail, wire and health care fraud; conspiracy to violate the anti-kickback statute; and money laundering. Two of the charges carry sentences of up to 20 years in prison and fines in excess of $250,000 while another carries a sentence of 5 years and a $25,000 fine. Seven other counts against him would be dismissed.

Ganote would plead guilty to conspiracy to commit mail, wire and health care fraud; conspiracy to violate the anti-kickback statute; and money laundering. Two of the charges carry sentences of up to 20 years in prison and fines in excess of $250,000 while another carries a sentence of 5 years and a $25,000 fine. Twelve other counts against him would be dismissed.

Joshua Burkhart will plead guilty to conspiracy to commit mail, wire and health care fraud. The charge carries a maximum sentence of 20 years in prison, a $250,000 fine or twice the gross gain or loss from the offense and 3 years of supervised release once his prison term concludes. Three other counts against him would be dismissed.

American Senior Communities responded to news of the defendants’ guilty pleas with the following statement:

American Senior Communities is grateful for the efforts to bring justice in the legal case involving ASC’s former CEO and COO and related parties. The plea agreements further strengthens our resolve to maintain our customers’ trust as we continue to provide exceptional senior care.