Former McKesson CFO Is Indicted on Fraud
A former McKesson Corp. executive was indicted Tuesday on federal securities fraud charges in connection with the company’s stock collapse that cost investors $9 billion in 1999 in one of the nation’s largest cases of accounting fraud at a Fortune 500 firm.
Richard Hawkins, the former chief financial officer of the health-services company, is the first executive to be charged in the scandal who was employed at the San Francisco-based company before it merged with Atlanta-based HBOC & Co. in January 1999. Six former HBOC executives have been charged in the accounting scandal.
The Securities and Exchange Commission also filed a civil complaint in connection with the charges against Hawkins, 53, of Atherton, Calif. He is expected to make an initial appearance in federal court in San Francisco today. His lawyer said Hawkins was not guilty.
Four of the indicted former HBOC executives have pleaded guilty to charges they conspired to make the firm’s pending merger more attractive.
After detecting the fraud, the merged McKesson restated its financial results for 1998 and the first three months of 1999. The revised accounting revealed gross exaggerations -- in late 1998, for instance, HBOC reported a profit that was seven times higher than the true result.