Joshua Burkhart, the younger brother of former American Senior Communities CEO James Burkhart, reached a plea agreement on Tuesday under which he acknowledged participating in what prosecutors allege was a $16 million overbilling and kickback scheme orchestrated by leaders of the big nursing home company.
Under the deal, Joshua Burkhart, 43, agreed to plead guilty to one felony count of conspiracy to commit mail, wire and health care fraud. In return, prosecutors agreed to drop three other felony counts.
The 14-page agreement filed in federal court late Tuesday afternoon does not specify a sentence on the single count, which is punishable by up to 20 years in prison.
The U.S. Attorney’s Office in October 2016 unsealed a 32-count indictment alleging that former ASC CEO James Burkhart, former ASC Chief Operating Officer Dan Benson, Joshua Burkhart and James Burkhart’s friend Steven Ganote used shell companies and inflated invoices to enrich themselves from 2009 through the fall of 2015.
The victims of the fraud were Indianapolis-based ASC, which is owned by the Jackson family of Indianapolis; the Health & Hospital Corporation of Marion County, which hired ASC to operate its nearly 70 nursing homes; and federal health care programs, the indictment alleges.
The same day that indictments were unsealed, prosecutors separately announced a single felony charge against David Mazanowski, founder of the Fishers-based landscaping firm Mainscape Inc., who was accused of overbilling ASC and then splitting the spoils of the fraud with his co-conspirators.
Joshua is the second of the five defendants to agree to plead guilty. Mazanowski said in court papers a year ago that he planned to plead guilty and formally did so this month. The other defendants have pleaded not guilty and are scheduled to stand trial in January.
According to Joshua's plea agreement, James Burkhart told his brother around 2009 that he wanted to provide him opportunities to earn more money. That year, Joshua began receiving monthly checks for thousands of dollars from Mainscape, ostensibly as consulting fees, though prosecutors said he didn’t do any work for the money.
Around the same period, Benson approached Joshua about purchasing American flags from him, for distribution to ASC nursing homes, even though Joshua had never been in the flag business. The plea agreement says Benson told him how much to charge, which gave him a robust profit compared with what he paid the flag distributor.
When Joshua worked with ASC employees on flag purchases, he concealed his relationship to the CEO by using the name Justin Barnes, Tuesday's filing says.
It says Joshua’s ill-gotten gains from the Mainscape and flag schemes totaled more than $250,000 but less than $550,000.
Joshua Burkhart is represented by Thomas Farlow and Jenai Brackett, attorneys in Frost Brown Todd’s Indianapolis office.