You are currently viewing Man Pleads Guilty to $9.5 Million Fraud Scheme

Man Pleads Guilty to $9.5 Million Fraud Scheme

A Texas man pleaded guilty in federal court on Monday to his role in a multi-million dollar fraud scheme in which conspirators impersonated North Kansas City-based Cerner Corporation in series of business and legal activities.

Albert Davis, 56, of Richardson, Texas, pleaded guilty before U.S. Chief District Judge Greg Kays to participating in a conspiracy to commit wire fraud.

By pleading guilty on Monday, Davis admitted that he was the leader of a conspiracy to commit wire fraud in which more than 10 victims suffered losses exceeding $9.5 million from Aug. 25, 2005, to Feb. 19, 2015. Conspirators engaged in a scheme to use Cernet Corporation’s reputation and standing in the medical field to manipulate business transactions and court proceedings in their favor.

Davis is the fith defendant to plead guilty. Co-defendants David Hernon, 55, of Fishers, Indiana, David Tayce, 67, of Lucas, Texas, and Richard Bryant, 41, and his wife, Christina Bryant, 41, both of Sachse, Texas, have also pleaded guilty to their roles in the conspiracy.

In order o 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, Missouri. 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.

For example, conspirators sent e-mails to doctors at Summit Medical Center in Oklahoma, which falsely represented Cerner Corporation in negotiations by containing a quote for the sale of a MRI to Summit Medical Center. Conspirators also created fraudulent invoices for the sale of an MRI to Dallas Medical Center.

Davis also admitted that conspirators provided false and misleading information and testimony during the litigation of several lawsuits. The false and misleading testimony was regarding business deals where the conspirators had impersonated Cerner Corporation.

For example, Davis received a jury award of $24 million following 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’s company). Davis admitted that similar false and misleading testimony was provided by conspirators in iHeart Care DMC Holdings, LC. v. Dallas Medical Center, LLC., et al., Case No. 13-09460, in Dallas County, Texas; and Alice George, et al., v. ALbert Davis, et al., Case No. 3:13-CV-03058-PKH, in the Western District of Arkansas.

In addition to impersonating Cerner Corporation, Davis admitted, conspirators used additional email 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 conspirators fraudulently obtained five individual loans from Community Trust Bank.

Conspirators also impersonated bondholders in order to file an involuntary bankruptcy petition against their own company, CMI Holding Company, Inc., in Case No. 10-38011-SGJ-7, in the Northern District of Texas. Conspirators continued to impersonate those bondholders throughout the litigation in phone calls and email communications, and by signing as the bondholders is a settlement agreement. Davis and his co-conspirators concealed their ownership of Eureka roup, LLC and used that entity to receive and disburse the monies received from the $1.8 million settlement of the involuntary bankruptcy.

Additionally, Davis admitted, conspirators solicited investments using fabricated communications and documents from entities they created, including the entity created to impersonate Cerner Corporation. Those misrepresentations included false financial documents, altered MRI images and false claims that used MRI systems were newly developed technology.