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Federal Contractor Misconduct Database (FCMD)

The federal government routinely awards contracts to companies with histories of misconduct, including contract fraud and other violations. POGO believes that providing this website will help to improve contracting decisions and increase public knowledge of how the government spends billions of taxpayer dollars each year. Read more…

Inadequate Accounting Practices

In October 2003, the Securities and Exchange Commission (SEC) began investigating how Cardinal Health accounted for expected settlements of lawsuits against vitamin manufacturers. The following year, the probe expanded to include Cardinal’s method of classifying its drug-distribution business revenue. As the result of an internal investigation, Cardinal restated its annual and quarterly financial statements for three years. The SEC alleged that, from September 2000 through March 2004, Cardinal engaged in a fraudulent revenue and earnings management scheme, as well as other improper accounting and disclosure practices. In January 2006, Cardinal reached a settlement with the SEC and agreed to pay a $35 million penalty.

Misconduct Type
Securities
Enforcement Agency
SEC
Contracting Party
None
Court Type
Administrative
Disposition
Settlement
Date of Announcement
7/26/2007
Contractors Involved Penalty
Total
Cardinal Health, Inc. $35,000,000
Further Information Released
SEC Press Release 9/3/2009
Cardinal Health Press Release 8/23/2006

Federal Contractor Misconduct Database