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The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations. In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data. We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »

McKesson

SEC v. McCall (Securities Fraud)

Date: 05/20/2010 (Date of Final Judgment)

Misconduct Type: Securities

Enforcement Agency: SEC

Contracting Party: None

Court Type: Civil

Amount: $1,878,128

Disposition: Judgment Against Defendant

Synopsis: In May 2010, a consent and final judgment against Charles McCall, former chairman of McKesson HBOC (now McKesson Corporation), was entered by the United States District Court for the Northern District of California. McCall was charged by the Securities and Exchange Commission (SEC) with securities fraud in connection with a financial reporting fraud at McKesson HBOC. The SEC complaint, filed in June 2003, alleged that McCall, together with other senior executives, participated in a long-running scheme to inflate the revenue and net income of HBO & Company, which merged with McKesson in 1999. SEC alleged McCall personally took part in negotiating at least two contracts with side letter agreements containing cancellation contingencies, one of which was also backdated. According to the complaint, these practices failed to comply with Generally Accepted Accounting Principles. As part of the final judgment, McCall agreed to pay almost $1.9 million in disgorgement and prejudgment interest. In November 2009, McCall was convicted of securities fraud and related charges arising from the fraud at HBOC and McKesson HBOC and was sentenced to ten years’ incarceration and ordered to pay a $1 million criminal fine. (See McKesson instance, “U.S. v. McCall et al. (Securities Fraud).”) McCall consented to the entry of judgment without admitting or denying the allegations of the complaint except as to jurisdiction. (See related McKesson instances, “McKesson/HBOC, Inc. Securities Litigation,” “SEC v. Smeraski (HBOC Securities Fraud)”, and “SEC v. Lapine (Securities Fraud)”.)