Federal prosecutors have filed a felony charge against the owner of Fishers-based Mainscape Inc., one of the nation’s biggest commercial landscaping companies, alleging he was a willing accomplice in a massive fraud orchestrated by former American Senior Communities CEO James Burkhart.
The U.S. Attorney’s Office in Indianapolis filed the case against Mainscape CEO Dave Mazanowski on Wednesday hours after a judge unsealed a 32-count indictment alleging James Burkhart, former ASC Chief Operating Officer Dan Benson, Burkhart’s brother Joshua and Burkhart’s friend Steven Ganote used shell companies and inflated invoices in a $16 million fraud and kickback scheme.
The victims of the fraud were ASC, which is owned by the Jackson family of Indianapolis; the Health & Hospital Corp. of Marion County, which hired ASC to operate its nearly 70 nursing homes; and federal health care programs, the indictment alleges.
One of the most-detailed examples in the indictment involved Mainscape, which Mazanowski started as a Ball State University student in 1980 as a way to employ Christian students who otherwise would go home for the summer. It grew steadily over the years and now ranks No. 18 on Landscape Management magazine's list of largest companies in the industry, with more than $71 million in annual revenue.
According to the indictment, at James Burkhart's direction, Mainscape between 2009 and 2014 inflated landscaping invoices by 5 percent and sent them to ASC for payment.
ASC then used Health & Hospital funds to pay the inflated amounts. In turn, Mainscape paid the 5 percent overcharges to Joshua Burkhart's shell company Circle Consulting LLC. Investigators allege Joshua Burkhart received about $400,000 in concealed Mainscape overcharges.
According to the indictment, James Burkhart and Mainscape upped the ante in January 2015, increasing the overcharges by an additional 45 percent. From that point until the scheme ended last fall, James Burkhart and Mainscape kept the overcharges for themselves, splitting them 50-50, with each receiving about $195,000, the indictment alleges.
Furthermore, according to the indictment, from 2009 to 2015 Mainscape, at James Burkhart's direction, submitted false invoices to ASC for "consulting" services that had not been performed. The payments were actually reimbursements to Mainscape's Mazanowski for James Burkhart's use of his plane, to reimburse him for a golf trip Burkhart had asked him to pay for, and to reimburse him for political contributions Burkhart had directed him to make.
In total, according to the indictment, about $1.5 million in Health & Hospital funds were used to pay Mainscape for fictitious consulting services.
A message left at Mainscape for Mazanowski Wednesday was not returned. Attorneys representing James Burkhart and Joshua Burkhart also could not be reached.
The one count against Mazanowski—conspiracy to commit mail, wire and health care fraud—carries a prison sentence of up to 20 years.
Prosecutors also are seeking to recoup the $195,000 they allege he collected in overcharges.