A former top official with HBO & Co., Atlanta, pleaded guilty to securities fraud in connection with what federal authorities described as "a far-reaching scheme to defraud shareholders." Albert Bergonzi, 53, former president and COO of HBO & Co., admitted overstating earnings and revenue to present a more robust financial picture of the healthcare software company before its 1999 acquisition by McKesson Corp., San Francisco. Bergonzi became an executive vice president at McKesson following the $12 billion deal. According to estimates, earnings were overstated by as much as $300 million. The fraud, one of the largest-ever involving a Fortune 500 company when it was exposed four years ago, began in January 1998 and continued through April 1999, authorities said.
In his plea agreement, Bergonzi said the object of the fraud was to mislead Wall Street analysts, investors and securities regulators about HBO & Co.'s "true revenue and earnings for the purpose of increasing and maintaining the company's stock price." Bergonzi pleaded guilty in U.S. District Court for the Northern District of California and agreed to cooperate with authorities in a continuing investigation of the scandal. He faces a maximum 15-year prison sentence. At deadline, his attorney was unavailable for comment. -- by Michael Romano