In 1997, U.S. federal agents launched a series of no-warning searches at the offices of Columbia/HCA, the largest for-profit health care provider in the United States, looking for evidence of improper charges billed to the federal government’s Medicare program. The chairman’s public comment that “government investigations are matter-of-fact in health care” sat poorly with the company’s directors, and the chairman was soon gone. Years later, the investigation continues. Most of senior management has been replaced. Several executives have been indicted; two are appealing jail sentences. Other investigations and suits have been launched against the company. Institutional investors are suing the board. The company’s stock has been as low as 40% of its previous high.
In 1996, food-processing giant Archer Daniels Midland (ADM) pled guilty to price-fixing charges. Key evidence had been gathered through an ADM manager who secretly recorded business meetings for the government. ADM was fined $100 million and promised to cooperate in the prosecution of its executives. Subsequent convictions included the vice chairman, who is now appealing a two-year jail sentence.
After several waves of bank failures in the U.S. savings and loan industry during the 1980’s, Congress funded the Office of the Special Counsel for Financial Institution Fraud, which coordinated a massive prosecutorial effort. Criminal convictions were obtained against 5,506 defendants; jail sentences were meted... To read the complete article, login or sign-up using the form below.
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