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Judge releases corporate fraud exec., keeps three in jail
10:44 AM MST on Thursday, April 17, 2008
COLUMBUS, Ohio (AP) -- An executive convicted in a $1.9 billion corporate fraud case took a federal order limiting his movements so seriously he called officials to ask if he could step outside to watch his children hunt Easter eggs.
James Dierker's three co-defendants offered similar testimony about how closely they followed the same order. But only Dierker was free Thursday following a daylong hearing in which the four argued to be released from jail.
U.S. District Judge Algenon Marbley ordered Dierker released on bond, but said the three others he dubbed a "leadership cabal" must stay behind bars.
Marbley said there was clear and convincing evidence that Dierker does not pose a flight risk while he awaits sentencing on his fraud conviction.
Dierker and four other executives were convicted March 13 in what prosecutors said was a scheme to defraud investors in National Century Financial Enterprises, based in suburban Dublin, which called itself the country's largest health care financing company when it collapsed in 2002.
Marbley had allowed the five to remain free pending sentencing. Then, last month, one of the executives, Rebecca Parrett, disappeared from her Arizona home and an arrest warrant was issued. She remains at large.
A few days later, federal prosecutors alleged the others had plotted to escape to Aruba on a cruise ship, and the remaining four, including Dierker, were arrested.
The government based its case on a government informant's conversation with National Century founder Lance Poulsen, who occupied a nearby cell while the two were in a Chillicothe jail earlier this year.
Poulsen was convicted last month of trying to bribe a witness to provide favorable testimony. He faces his own trial in the alleged fraud scheme in August.
All four defendants testified before Marbley at a daylong hearing Wednesday, but only Dierker said that, not only was there no conspiracy to escape, he had not spoken to Poulsen since 2002.
Marbley said he found that distinction compelling, and noted that the three other defendants only testified that they hadn't participated in a conspiracy.
Marbley also said he found evidence submitted on Dierker's behalf by executives at Victoria's Secret, where Dierker works in marketing, compelling proof that Dierker has work commitments that make it unlikely he would flee.
Sharen Jester Turney, the president and chief executive officer of Victoria's Secret, testified that the company firmly believed Dierker would meet his professional responsibilities as long as he could.
Dierker called to ask permission to watch his children hunt for Easter eggs on the lawn at his suburban Columbus home, Keith Manfra, a U.S. pretrial services supervisor, testified during the hearing.
Marbley noted the defense didn't offer any proof to contradict the jailhouse testimony of informant Robert Cihy. He said the defense could have called Poulsen but chose not to.
Poulsen's attorneys deny he knew anything about such a plot.
Marbley said he also had to consider the impact of Parrett's disappearance.
The three defendants ordered to remain in jail are Roger Faulkenberry of Columbus, Randy Speer of Peachtree City, Ga., and Donald Ayers of Ft. Myers, Fla.
Cihy, 43, testified that after he told Poulsen that Poulsen should just take his own ship and sail off, Poulsen told him he had the right idea but wasn't thinking "out of the box" enough.
Poulsen then explained how it was possible to enter a Caribbean island like Aruba without a passport if you sailed on a large cruise ship, said Cihy, under questioning by Frederick Benton, an attorney for Speer.
Poulsen said the disappearance of Parrett "threw a kink in the plan," Cihy testified. Cihy did not quote Poulsen as directly saying there was a plot to flee to Aruba.
New rules that would require a passport to travel to the Caribbean on a cruise ship do not go into effect until next year. Passports were required for air travel as of last year.
Cihy acknowledged a former addiction to crack cocaine and marijuana use, and did not attempt to hide his criminal past.
The split decision created an emotional courthouse scene, as relatives of Dierker, including his wife and parents, wept, and relatives of the other three hugged and sobbed.
The four are expected to be sentenced later this year.
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On the Net:
U.S. Attorney's Office: http://www.usdoj.gov/usao/ohs/
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