In another alleged case of executives at publicly traded companies cooking the books to inflate stock prices, the U.S. attorney in New York and the Securities and Exchange Commission today indicted six former executives from New York-based Impath, a cancer information, diagnostic-services and testing company serving oncologists and hospitals. The six, who face criminal securities fraud and conspiracy charges, include ex-Impath Chairman and Chief Executive Officer Anuradha Saad and former President and Chief Operating Officer Richard Adelson. Former Chief Financial Officer David Cammarata, former Vice President of Finance Peter Torres, former Controller Karin Gardner and former National Billing Director Kenneth Jugan pleaded guilty this week and last week in the scheme. According to the indictment and criminal information charging documents, the defendants falsified entries, failed to disclose material facts to auditors and lied to them.
At a news conference today, U.S. Attorney David Kelley announced the indictment, charging that the executives illegally conspired to boost stock share prices by manipulating the company's financial data from 2000 to 2002, falsely overstating publicly reported net revenue by more than $64 million during that period. Once the alleged fraud was discovered in July 2003, Impath's stock price dropped 88%, costing shareholders more than $260 million. Two months later the company filed for bankruptcy. In 2004, Westborough, Mass.-based Genzyme Genetics, a prenatal and oncology testing provider and subsidiary of Genzyme Corp., acquired Impath Physician Services and Impath Analytical Services for $215 million. Impath no longer exists as an independent company. The defendants could not be reached for comment at deadline. -- by Mark Taylor