The former chairman of healthcare information technology and drug distribution giant McKesson HBOC--since renamed McKesson Corp.--and two other former top company officials are facing federal criminal charges of securities fraud.
A grand jury in San Francisco on Wednesday indicted former McKesson HBOC Chairman Charles McCall, former Vice President Albert Bergonzi and former HBOC general counsel Jay Lapine, alleging that the three led a scheme to overstate revenue and earnings for the first three quarters of 1998.
All three were fired in June 1999, two months after the company uncovered accounting tricks, the government says.
McKesson, headquartered in San Francisco, purchased Atlanta-based IT company HBO & Co. in January 1999 and operated as McKesson HBOC until July 2001.
U.S. Attorney Kevin Ryan says that Lapine, 51, of Alpharetta, Ga., turned himself in to authorities in San Francisco and that an arrest warrant has been issued for McCall, 59, of Fort Lauderdale, Fla. FBI officials say they believe that McCall is out of the country, but there is no allegation that he fled the United States to avoid arrest.
Ryan's office, in conjunction with the FBI, also announced that onetime HBOC executives Jay Gilbertson and Dominick DeRosa pleaded guilty to securities fraud and that Timothy Heyerdahl, who served as senior vice president for finance at HBOC, confessed to insider trading. The DeRosa plea had been under court seal since 2000.
Additionally, the Securities and Exchange Commission filed civil securities fraud charges against DeRosa; similar cases are pending against Bergonzi and Lapine.
"Charles McCall betrayed the trust that the shareholders of HBO & Co., and later McKesson HBOC, placed in him," SEC San Francisco District Administrator Helane Morrison says in a written statement. "McCall actively participated in the fraudulent scheme that ultimately cost shareholders over $9 billion, and the SEC is determined to hold him accountable for his actions."
A McKesson spokesperson was traveling on Thursday and unable to provide Modern Physician with a statement.