Another former executive or business associate of a business unit of what once was WebMD Corp., now Emdeon Corp., has pleaded guilty to criminal charges of conspiring to fraudulently inflate the company's earnings, according to the U.S. attorney's office in South Carolina. Henry Holbrook, 51, also pleaded guilty Monday to tax evasion, the Associated Press reported. Federal prosecutors said he had companies acquired by Medical Manager pay kickbacks to himself and others, then didn't report the $193,880 he received on his tax returns. Prosecutors also allege Holbrook profited from the conspiracy by selling his shares of Medical Manager stock while the price was fraudulently inflated, making nearly $3.5 million.
In January 2005, Robert Davids, 41, the former vice president for mergers and acquisitions of physician office-management software developer Medical Manager Health Systems, another former Medical Manager executive, and a software reseller and consultant for the company entered guilty pleas for a single count of mail fraud. Another plea deal on a single mail-fraud charge was announced involving a fourth Medical Manager executive in March 2005, followed by the indictment of 10 former Medical Manager executives in December 2005 on various charges, including conspiracy and conspiracy to money launder, and, for one of the 10, a money-laundering charge. Among those charged with conspiracy and conspiracy to money launder was Medical Manager founder and former chairman of the board and chief executive officer Michael "Mickey" Singer, of Alachua, Fla. The allegedly fraudulent activities occurred between 1997 and 2002, according to the government.
WebMD spokeswoman Jennifer Meyer Newman said Medical Manager Health Systems changed its name to Medical Manager Corp. when it went public in 1997. In July 1997, the Tampa, Fla.,-based company was acquired by Synetic, of Elmwood Park, N.J., but the merged companies retained the name Medical Manger Corp., while the practice-management subsidiary was renamed Medical Manager Health Systems. Medical Manager Corp. was acquired by then Healtheon/WebMD in September 2000. The practice management unit was renamed WebMD Practice Services in October 2003. The unit is now called Emdeon Practice Services, a subsidiary of Emdeon Corp. Newman said of the recent plea agreement that, "We cannot comment on specifics, but we do not see this as additive." Newman cited a statement issued Dec. 15, 2005, by Kevin Cameron, CEO of Emdeon Corp., after the 10 indictments were handed down, that the indictments "were an important step towards bringing closure on this issue."