Texas Man Sentenced for $19 Million Fraud Scheme

https://www.justice.gov/usao-wdmo/pr/texas-man-sentenced-19-million-fraud-scheme

Department of Justice
U.S. Attorney’s Office
Western District of Missouri

FOR IMMEDIATE RELEASE
Monday, April 24, 2017

Texas Man Sentenced for $19 Million Fraud Scheme

Conspirators Impersonated Cerner Corporation

KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a Texas man was sentenced in federal court today for his role in an elaborate, multi-million-dollar fraud scheme in which conspirators impersonated North Kansas City-based Cerner Corporation in business and legal activities. Albert Davis, 56, of Richardson, Texas, was sentenced by U.S. Chief District Judge Greg Kays to 12 years in federal prison without parole. The court also ordered Davis to pay $19,151,555 in restitution to the victims of his fraud scheme.

On Oct. 3, 2016, Davis pleaded guilty to participating in a conspiracy to commit wire fraud. Davis admitted that he was the leader of a conspiracy to commit wire fraud in which more than 10 victims suffered millions in losses from Aug. 25, 2008, to Feb. 19, 2015. Conspirators engaged in a scheme to use Cerner Corporation’s reputation and standing in the medical field to manipulate business transactions and court proceedings in their favor.

The decade-long criminal conduct, including relevant conduct from several other jurisdictions, involved perjured testimony, doctored trial exhibits, a manipulated multi-million dollar civil verdict, a fake bankruptcy filing, the use of fake people with fake email accounts, impersonated companies and a phalanx of over 70 entities to conceal it.
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In order to impersonate Cerner Corporation, Davis and his co-conspirators created a fake Cerner business entity for a similarly-named company, Cerner, LLC. Conspirators opened a fake Cerner bank account, registered a fake Cerner Internet domain and leased virtual office space for a fake Cerner address in Kansas City, Mo. They created fictitious employees from Cerner Corporation – including both fictitious identities and impersonating actual employees – to communicate with others. Conspirators fabricated documents, price quotes, agreements and invoices, which were all made to appear to be authentic Cerner Corporation documents, when they were not.
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Conspirators also created fraudulent invoices for the sale of an MRI to Dallas Medical Center (DMC), which paid over $1 million to what they believed was Cerner Corporation, but which turned out to be nothing more than one of Davis’ shell companies. When DMC was not acting quickly enough on the deal, Davis created fake e-mail accounts for prominent cardiologists in Dallas. Davis then used these fake email accounts to draft e-mails to himself, which stated that these cardiologists could not wait to get Davis’ MRI system at DMC. Davis then forwarded these e-mails to DMC, which created the impression of demand for his system at DMC. Smith also provided “references” for DMC to check on him. These “references” turned out to be more fake doctors and co-conspirators playing the role of satisfied business partners of Davis on the phone.
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According to court documents, the Dallas Medical Center scheme was just a sliver of the fraud Davis and his co-conspirators committed. In another example, Davis brought a lawsuit against Korean company ISOL Technology. After testifying falsely about business dealings with Cerner Corporation and offering fake exhibits to support his claim of damages, Davis received a jury award of $24 million in the 2014 trial in LBDS Holding Company, LLC v. ISOL Technology, Inc., et al., Case No. 6:11-CV-428-LED, in the Eastern District of Texas. When the fraud was discovered, attorneys for ISOL Technology filed an emergency motion for sanctions against LBDS (Davis’ company).

In addition to impersonating Cerner Corporation, Davis admitted, conspirators used additional e-mail accounts to impersonate business entities and physicians in order to send communications designed to manipulate others in business transactions. For example, conspirators forged signatures and misled doctors into guaranteeing over $8 million in loans from Community Trust Bank in Texas. Davis admitted that he and his co-conspirators fraudulently obtained five individual loans from Community Trust Bank.
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