A federal district judge has overturned the convictions of two former executives of the Medical Manager physician software company that now is part of Sage Healthcare.

In March, John Kang, former president of Medical Manager; and John Sessions, former vice president and COO, were convicted of conspiracy to commit mail, wire and securities fraud. They were found guilty of participating in a conspiracy to fraudulently inflate reported earnings by more than $16.8 million between 1997 and 2003, according to the U.S. Department of Justice. Kang and Sessions faced maximum sentences of five years in prison and a fine of $250,000, or twice the amount of the related gain or loss resulting from the conduct.

Now, Judge David Norton of the U.S. District Court in Charleston, S.C., has turned back the convictions, saying the government-issued indictments in 2005 against 10 former executives exceeded the five-year statute of limitations, according to The Gainesville Sun in Florida, where Medical Manager was headquartered and Sage maintains an office. Any offenses Kang and Sessions may have committed would have occurred before WebMD bought Medical Manager in 2000, Norton ruled.

The ruling may affect previous guilty pleas from six other former Medical Manager executives, including CEO Michael Singer, and the upcoming trial of two other executives. In his ruling, Norton also questioned the tactics and costs of the government's investigation and prosecution of company executives. For more information, click here.

--Joseph Goedert


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