Emdeon, formally WebMD Corporation, is shrugging off the indictment of 10 former executives and employees on charges they manipulated the books of a company subsidiary, Medical Manager Health Systems, between 1997 and 2001.

On Dec. 16, U.S. District Attorney for South Carolina Jonathan S. Glasser announced the indictments of Medical Manager founder Michael Singer, former president John H. Kang, Frederick B. Karl Jr., the firm's former vice president and general counsel; John Sessions, Lee Robbins, Charles Hutchinson, David Ward, Franklyn Krieger, Ted Dorman and Maxie Juzang.

The indicted are expected to appear at U.S. District Court in Charleston, S.C. on Dec. 28. They have been charged with conspiring to artificially inflate Medical Manager’s quarterly revenues by $16.8 million in order to meet and exceed the expectations of financial analysts. That, in turn, Glasser said, fraudulently inflated the market price of Medical Manager and WebMD stock.

The maximum penalties on fraud conspiracy is five years in prison and a fine of $250,000, or twice the amount of pecuniary gain or loss resulting from the conduct. The penalty on the money laundering conspiracy is 20 years in prison and a fine of $500,000 or twice the value of the property involved in the transaction. Agents of the FBI and the IRS investigated the case.

“Corporate fraud continues to be the number one priority for the FBI's Financial Crimes Program,” said Brian D. Lamkin, Special Agent in Charge of the Columbia Division of the FBI. ”The efforts of the Medical Manager investigative team should serve as a reminder that white collar crime is considered a high priority to the FBI and its law enforcement partners.”

Medical Manager was founded in 1991. It went public in 1997 and was acquired by WebMD in 2000. When WebMD became Emdeon this summer, Medical Manager was renamed Emdeon Practice Services. Officials at Emdeon say they will work with the government to resolve the matter quickly.

“The actions by the government are against former employees and do not affect in any way Emdeon's business operations," said Kevin Cameron, CEO, Emdeon Corporation in a press release issued late last week. "We believe that this announcement is an important step towards bringing closure to this issue.”

Cameron added that he did not believe the investigation or its results would require Emdeon to restate any past earnings.