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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. Smeraski (HBOC Securities Fraud)

The United States District Court for the Northern District of California entered a consent and final judgment against Michael G. Smeraski, former senior sales vice president at HBO & Company, Inc. (HBOC), an Atlanta, Ga.-based health care software vendor that merged with McKesson in 1999. Smeraski was charged with securities fraud in connection with a long-running scheme at HBOC to fraudulently inflate revenue and net income. Smeraski and others routinely approved software sales contracts with associated side letters containing unsatisfied contingencies precluding revenue recognition and backdated contracts and other documents for the purpose of recognizing revenue in an earlier reporting period. These practices failed to comply with Generally Accepted Accounting Principles. In addition to being permanently enjoined from violating the antifraud provisions of the federal securities laws, Smeraski was ordered to pay a civil penalty of $50,000. See related McKesson misconduct instances “McKesson/HBOC, Inc. Securities Litigation” and “McKesson/HBOC Inc. ERISA Litigation.”

Misconduct Type
Securities
Enforcement Agency
SEC
Contracting Party
None
Court Type
Civil
Disposition
Judgment Against Defendant
Date of Final Judgment
8/7/2007
Contractors Involved Penalty
Total
McKesson $50,000
Further Information Released
SEC Press Release 8/22/2007

See also:

Federal Contractor Misconduct Database