A onetime CEO of the information technology division of what is now called McKesson Corp. is the third former executive of HBO & Co. to admit to criminal wrongdoing in an ongoing investigation of accounting irregularities, federal officials say.
In U.S. District Court in San Francisco, Albert Bergonzi, 53, of Atlanta, on Thursday pleaded guilty to one count of securities fraud and another count of conspiracy to commit securities fraud. He faces a maximum sentence of 15 years in prison and $1.25 million in fines.
Bergonzi also must pay the proceeds from the sale of McKesson stock as restitution.
According to court documents, Bergonzi used his executive positions to help inflate company revenue to mislead investors and pump up the stock price in 1998 and 1999.
"From the first half of 1998 through April 1999, I actively participated in the use of side letters and backdating, both in contracts I negotiated and by encouraging my subordinates to use them in contracts they negotiated," Bergonzi says in the plea agreement.
Bergonzi was president and COO of Atlanta-based IT firm HBOC until its January 1999 merger with McKesson, a giant San Francisco-based distributor of pharmaceuticals and medical supplies. He then became executive vice president of the merged company, McKesson HBOC, and CEO of the IT division until he was fired in July 1999 after federal investigators uncovered evidence of accounting violations, the government says.
McKesson HBOC changed its name to McKesson Corp. in July 2001.
Since the investigation began, two former HBOC vice presidents, Dominick DeRosa and Timothy Heyerdahl, also have pleaded guilty. Charges against two other former executives are pending.