The Justice Department has indicted 10 former executives at a one-time unit of WebMD Corp., alleging the executives conspired to inflate earnings at the unit by more than $16.8 million from 1997 to 2001.
Former Medical Manager Health Systems Inc. Chief Executive Mickey Singer, 58, was among the executives charged Thursday. The 10 former executives at Medical Manager also were charged with money laundering in connection with the proceeds of the scheme.
"Corporate executives are bound by the law to provide truthful information about their company's finances to the investing public," said Alice S. Fisher, assistant attorney general in the Justice Department's criminal division.
"The marketplace requires honest, full disclosure and accountability. The Justice Department will continue to aggressively pursue those executives who choose criminal fraud over responsible financial reporting as their way of doing business," Fisher said.
Medical Manager, formerly based in Tampa, Fla., was a unit of WebMD Corp. from 2000 to 2005 and had nationwide operations. The unit is now known as Emdeon Practice Services and is part of Emdeon Corp. of Elwood Park, N.J.
The government alleged that the executives used numerous tricks to inflate earnings, including paying inflated prices for firms it was acquiring and then requiring the acquired firm to purchase software from Medical Manager.
The tactic - known as "round-trip transactions" - had the effect of creating fraudulent revenue, the government charged.
A phone call to Emdeon was not immediately returned. A lawyer for Singer could not immediately be located.