UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17189 / October 15, 2001
Accounting and Auditing Enforcement Release No. 1467 / October 15,
2001
SEC CHARGES SIX FORMER SENOR EXECUTIVES AND EMPLOYEES IN MASSIVE
FINANCIAL REPORTING FRAUD SCHEME AT MCKESSON HBOC, INC.
SECURITIES AND EXCHANGE COMMISSION v. JAY LAPINE, United States
District Court for the Northern District of California, Civil Action
No. C-01-3650 (VRW)
SECURITIES AND EXCHANGE COMMISSION V. MICHAEL SMERASKI, TIMOTHY
HEYERDAHL, DEBORAH MATTIFORD, ELAINE DECKER, AND DAVID HELD, United
States District Court for the Northern District of California, Civil
Action No. C-01-3651 (MMC)
On September 27, 2001, the United States Securities and Exchange
Commission filed securities fraud charges against the former General
Counsel, Senior Vice President of Finance, Chief Financial Officer,
Senior Vice President in charge of Enterprise Sales, and two other
former gatekeepers of the financials of HBO & Company ("HBOC"), later
a subsidiary of McKesson HBOC, Inc. (now known as McKesson
Corporation). The Commission alleges that each of the senior managers
played integral roles in a scheme to "cook the books" of the company.
The wrongdoing pervaded the top levels of HBOC's legal, finance,
accounting, sales and other departments. This massive financial
reporting fraud scheme began at Atlanta-based HBOC in 1997, and
continued after its January 1999 merger with San Francisco-based
McKesson Corporation. When the fraud was first disclosed in April
1999, McKesson HBOC shares tumbled from approximately $65 to $34, a
decline that slashed the company's market value by more than $9
billion.
These complaints follow the Commission's action on September 28, 2000,
in which the Commission brought fraud charges against the former
co-Presidents and the former head of sales of HBOC at the same time
that the co-Presidents were indicted by the United States Attorney's
Office for their direction of the financial fraud scheme. Those
actions are pending.
The complaints filed September 27, 2001 were filed in federal district
court in San Francisco, and the Commission alleged that the six former
top officers and employees of HBOC participated in the scheme by
booking revenue on incomplete deals, backdating contracts, falsifying
the company's financial records, and/or lying to the outside auditors
SNIPPETS:
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
SEC CHARGES SIX FORMER SENOR EXECUTIVES AND EMPLOYEES IN MASSIVE FINANCIAL REPORTING FRAUD
SECURITIES AND EXCHANGE COMMISSION v. JAY LAPINE, United States District Court for the
On September 27, 2001, the United States Securities and Exchange Commission filed securities
The Commission alleges that each of the senior managers played integral roles in a scheme to
The wrongdoing pervaded the top levels of HBOC's legal, finance, accounting, sales and other
These complaints follow the Commission's action on September 28, 2000, in which the
The complaints filed September 27, 2001 were filed in federal district court in San
Named were the following Jay Lapine, former General Counsel of HBOC and later the HBOC
Lapine lives in Alpharetta, Georgia.
Michael Smeraski, former Senior Vice President of Enterprise Sales of HBOC and later McKesson
Timothy S. Heyerdahl, a Certified Public Accountant and former Senior Vice President of
Deborah Mattiford, former director of HBOC's Contract and Administration Department, violated
Elaine Decker, a former Certified Public Accountant and former Manager of Contract Accounting
Financial Officer of HBOC and later the HBOC division of McKesson HBOC, approved recognition
One complaint also alleges that Smeraski, Heyerdahl, and Decker violated the antifraud
The complaints further allege that Lapine, Heyerdahl, Decker, Held and Mattiford aided and
Heyerdahl also agreed to disgorge $521,492.18 in ill-gotten gains, to pay a civil penalty of
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