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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…

SEC v. McCall (Securities Fraud)

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)”.)

Misconduct Type
Securities
Enforcement Agency
SEC
Contracting Party
None
Court Type
Civil
Disposition
Judgment Against Defendant
Date of Final Judgment
5/20/2010
Contractors Involved Penalty
Total
McKesson $1,878,128
Further Information Released
Complaint 11/24/2010
Final Judgment 11/24/2010
SEC Press Release 11/24/2010

See also:

Federal Contractor Misconduct Database