Drug wholesaler agrees to $960 million fraud settlement
Compliance Monitor, January 19, 2005
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McKesson Corp. agreed to pay $960 million to settle a class-action lawsuit filed by its shareholders alleging accounting fraud at a company the drug wholesaler acquired in 1999, Reuters reported January 12.
"This was a significant challenge for our corporation and it is nice to have it behind us," John Hammergren, McKesson chairman and chief executive, said during a conference call.
The suit related to HBO & Co., a healthcare information technology firm McKesson acquired in 1999. According to Reuters, months after the sale was complete, McKesson restated its financial results due to improper accounting. Several former HBO executives were accused of fraud (four eventually pleaded guilty to criminal charges) and some senior-level McKesson executives were fired.
In addition to the settlement, McKesson also established a $240 million fund to cover remaining lawsuits surrounding the HBO restatement, Reuters reported.
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