INDIANAPOLIS, Ind. – Two former executives with American Senior Communities (ASC) who pleaded guilty in a multi-million dollar kickback scheme learned their sentences Monday.
Josh Burkhart was sentenced to four months in prison. He was ordered to pay $420,000 in restitution and will also have two years of supervised release. He’s the brother of former ASC CEO James Burkhart, who was painted as the “mastermind” of the $19 million fraud case.
Josh is accused of creating a company called Heartland Flag LLC, which sold American, Indiana and ASC brand flags to ASC at a 150% markup and often replaced the flags several times a year.
Steven Ganote received a 5-year prison sentence. He’ll have to pay $7 million in restitution and will be on supervised release for two years.
Officials say Ganote created Indiana Uniform Company LLC to sell ASC discharge packages, embroidered uniforms, seasonal door wraps, luggage carts and t-shirts at a 200% markup.
One furniture company CEO told investigators Ganote requested inflated invoices of up to 25% with the overcharge to be paid back to a shell company he owned, advising the furniture maker, “just between you and me…(James Burkhart’s) a part of that LLC. That’s all you need to know.”
The federal probe uncovered a complex series of billings and agreements stretching back to early 2009 that involved inflated costs and invoices claiming markups typically as high as 40% and kickbacks that enriched conspirators. They funneled money through more than a dozen shell companies, totaling nearly $19.4 million in criminal proceeds.
On July 10, David Mazanowski was sentenced to three years of probation. The first six months will be served at a halfway house and six months of electronic monitoring will follow that. He will also pay a $60,000 fine and pay $808,000 in restitution.
Mazanowski is not a former executive of ASC, but was involved in the scheme. Prosecutors say he used shell companies to conceal overcharges for landscaping and snow removal services at ASC properties.