FOR IMMEDIATE RELEASE                                    2000-145

Civil and Criminal Fraud Charges Filed Against Former Executives
   for Massive Financial Reporting Violations at McKesson HBOC

     San Francisco, CA, September 28, 2000 - The Securities and
Exchange Commission today announced the first charges from its
continuing investigation into financial reporting fraud at
McKesson HBOC, a Fortune 100 company with headquarters in San
Francisco, California.  The Commission's action charges three
people, including the two top officers of HBO & Company, with
participating in a long-running fraudulent scheme to inflate the
company's revenue and net income.  In a separate action, the U.S.
Attorney's Office for the Northern District of California also
filed criminal charges against two of the officers.  McKesson
HBOC was formed by the January 1999 merger of San Francisco-based
McKesson Corporation with HBO & Company, an Atlanta, Georgia-
based vendor of healthcare software.

     According to the Commission's complaint, the fraud began at
HBO & Company in 1997 and continued in successive quarters
through the March 1999 quarter, which was the first combined
reporting period for McKesson HBOC.  The defendants' fraud
enabled HBO & Company to report falsely in press releases and in
periodic reports filed with the Commission that the company was
having an unbroken run of financial success and that HBO &
Company had continually exceeded analysts' quarterly earnings
expectations.  However, when McKesson HBOC announced in April
1999 that the company was conducting an internal investigation
into financial reporting irregularities, its shares tumbled from
approximately $65 to $34, a drop that slashed the company's
market value by more than $9 billion.
     
     The Commission's complaint charges that two former top
executives of HBO & Company, Jay P. Gilbertson and Albert J.
Bergonzi, were the architects of this fraudulent scheme to "cook
the books."  While carrying out this scheme, defendants unjustly
enriched themselves with lucrative bonuses tied to the company's
financial performance, as well as sales of HBO & Company stock at
prices inflated by their fraud.  Gilbertson and Bergonzi were HBO
& Company's Co-Presidents and Co-Chief Operating Officers, and
Gilbertson was also HBO & Company's Chief Financial Officer until
he left the company in November 1998.  Following the January 1999
merger, Bergonzi was an Executive Vice President of McKesson
HBOC, and remained President of the HBO & Company division of the
combined company until June 1999.
     
     The Commission's complaint also names as a defendant
Dominick A. DeRosa, who was Vice President of Enterprise Sales of
HBO & Company until September 1998.  The complaint alleges that
Bergonzi, Gilbertson, and DeRosa repeatedly took active steps to
perpetuate the fraud and conceal their actions from the public,
including:

  ú    Concealing contingencies related to software sales contracts
     in "side letters," which were hidden from HBO & Company's
     accounting staff responsible for revenue recognition.  These side
     letter contingencies included such terms as rights to cancel, and
     even provided in some cases for continuing negotiations of the
     contract.  Under generally accepted accounting principles,
     software sales contracts cannot be recorded as revenue until such
     contingencies are resolved.
  
  ú    Fraudulently accounting for quarter- and year-end revenue by
     routinely backdating contracts so they fell within the prior
     quarter.
  
  ú    Making fraudulent journal entries designed to understate
     expenses and inflate HBO & Company's net income.

  ú    Swapping product with other companies and creating
     misleading documentation in order to generate fraudulent software
     sales revenue.

     As a result of the fraud, the financial statements of HBO &
Company, and later McKesson HBOC, were materially false and
misleading during at least the period January 1998 through April
1999.  The Commission's complaint alleges that the defendants
violated the antifraud, internal controls, and books and records
provisions of the federal securities laws, and also alleges that
Gilbertson violated the rule against lying to auditors.  The
complaint also alleges that each of the defendants was unjustly
enriched through significant bonuses tied to meeting earnings
expectations, or through sales of HBO & Company stock while the
price was inflated due to their fraud, and seeks to compel
disgorgement of these sums.  The complaint further seeks to
suspend or bar the defendants from serving as officers or
directors of public companies.

     Simultaneous with the filing of the Commission's civil
complaint, DeRosa consented, without admitting or denying the
allegations in the Commission's complaint, to the entry of a
permanent injunction against all of the alleged violations.  He
agreed to disgorge $361,528.80 in ill-gotten gains (including
interest) and to pay a civil penalty of $50,000.  DeRosa also
agreed to be barred for five years from serving as an officer or
director of a public company.

     Helane L. Morrison, District Administrator of the
Commission's San Francisco District Office, said: "This is one of
the largest financial reporting frauds ever, both in terms of the
scope of the scheme and the impact on innocent investors.
Today's criminal and civil actions should send a strong message
to corporate officials that such fraud simply does not pay."

     In a separate action, the U.S. Attorney's Office for the
Northern District of California announced criminal charges
against Gilbertson and Bergonzi for their roles in the fraud.  A
press release describing the criminal action is attached.

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For further information contact:

Helane L. Morrison, District Administrator, (415) 705-2450
Robert L. Mitchell, Assistant District Administrator, (415) 705-
2351
San Francisco District Office