Regulators charged a top accountant at a Hospira subsidiary with bilking the drug company of $1.3 million.
The Securities and Exchange Commission said Paul R. Beckwith of Layton, Utah, has been funneling money out of Hospira’s Theradoc unit for almost two years.
Beckwith, who is identified as the controller at Salt Lake City-based Theradoc, has made unauthorized transfers exceeding $3 million over that span, the SEC said.
The SEC said Beckwith, who also runs a certified public accounting firm bearing his own name, began making withdrawals from the hospital information-management company in February 2009.
Initially he moved money out of Theradoc accounts without permission before putting it back in a few weeks later. But he “has now grown bolder” and appears to have dispensed with the formality of returning the funds, the SEC said.
The agency said Beckwith has withdrawn $1.3 million from Theradoc’s operating accounts over the past six weeks and hasn’t repaid any of them. He also seems to have started frittering away the money on ill-advised trades, though the SEC fails to provide any details.
The most recent withdrawal occurred on September 15, 2010. Beckwith then deposited those funds in trading accounts maintained at TD Ameritrade, a broker-dealer. Beckwith traded securities in those accounts, keeping profits and recently, incurring losses.
The SEC obtained an order from a federal judge freezing Beckwith’s assets and is pressing for the return of the money and civil penalties. The agency said the FBI and the U.S. attorney in Utah helped in its case.
Beckwith didn’t immediately return a call seeking comment.
Beckwith lied to Theradoc, which Hospira acquired late last year, and circumvented its internal controls, the SEC said. Even so, its suit doesn’t exactly put Hospira — whose shares have rallied in recent weeks to within a few dollars of their 52-week high — in the best light.
The SEC said this of the Lake Forest, Ill., company:
Because Hospira has not fully integrated Theradoc’ s financial accounting system into its own, Hospira lacked effective oversight and monitoring of the financial reporting and accounting functions of Theradoc.
Update: A Hospira spokeswoman says the firm alerted the authorities this month after finding irregularities in the Theradoc account. She noted that the SEC case alleges theft by Beckwith and doesn’t claim any wrongdoing on the part of the company.