""We are extremely pleased to welcome Bruce to World Health's management team. He brings a broad base of financial and operational experience to World Health, as well as a solid reputation among the financial community. We believe that his background with high growth companies, including his significant experience with mergers, acquisitions and integrations, will complement our current management team and strengthen World Health," said Richard McDonald, World Health's President. "
"Most recently, Mr. Hayden served as CFO of Xybernaut Corporation (XYBR.PK), a provider of mobile computing products and services. Prior to that role, he was the CFO of Galt Associates, Inc., a software product and consulting services company that services many of the top 25 international pharmaceutical companies. "
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Ex-CEO of World Health accused of fraud
Shareholder lawsuit claims Richard McDonald manipulated books on taxes, number of shares
Saturday, April 22, 2006
By Len Boselovic, Pittsburgh Post-Gazette
Former World Health Alternatives co-founder Richard E. McDonald enriched himself by millions of dollars at the expense of shareholders of the troubled Wilkins-based medical staffing firm, according to a lawsuit filed yesterday in federal court in Pittsburgh.
World Health's shares tumbled last August after Mr. McDonald resigned and the company disclosed significant accounting discrepancies. The firm subsequently sought bankruptcy protection in February.
The lawsuit, filed in U.S. District Court on behalf of shareholders, says the fraud was possible because Mr. McDonald acted as both chief executive officer and the top accounting officer, eliminating the controls companies typically have on their accounting.
It alleges Mr. McDonald's manipulation of the company's books included obscuring the fact that the company wasn't paying federal payroll taxes by creating a bogus loan from himself to the company. The loan balance reached as much as $3.6 million, but was subsequently reduced as the company repaid a loan that was never made, the lawsuit states.
A search of Mr. McDonald's office after his sudden departure unearthed a personal brokerage account valued at $40 million, the lawsuit states. World Health stock accounted for about $22 million of his portfolio. Shareholders attorneys question how Mr. McDonald, 32-years-old at the time, could have accumulated such a sum. They say he had never been paid an annual salary exceeding $200,000 and had not reported sales of World Health shares.
Mr. McDonald, whose five-bedroom Murrysville home is for sale at a list price of $594,000, also inflated revenue, according to the lawsuit. In the first quarter of last year, he told then Chief operating officer John Sercu that a reality TV show was willing to pay $1 million for the right to film World Health employees on the job. No such offer was ever made, but the $1 million was included in the company's results, the lawsuit states.
He also included the first few days of revenue a subsidiary received in the next quarter in the prior quarter's results. That deceived investors into thinking World Health could achieve its earnings forecasts, the lawsuit states. The subsidiary's costs during those first few days weren't included in the results.
Mr. McDonald also manipulated the number of World Health shares outstanding by editing the official list of shareholders kept by the company's transfer agent, Manhattan Transfer Registrar Co., the lawsuit alleges. He deleted entries from the list, thereby reducing the number of shares, which had the effect of increasing World Health's earning per share, according to the lawsuit.
Shareholders lawyers believe shares that were deleted were sold by Mr. McDonald, possibly through family members, friends or members of his church.
Daszkal Bolton, World Health's former auditing firm, never verified the shareholder list through Manhattan Transfer, the lawsuit states. The transfer agent noted that the number of shares in the company's securities filings didn't correspond to its list, but did not question the discrepancy, the lawsuit states. The lawsuit lists the accounting firm and transfer agent as defendants.
Some of the allegations are based on an interview with a former World Health officer who participated in a company investigation after Mr. McDonald left. The lawsuit indicates the FBI is investigating, as well as the Securities and Exchange Commission.
It is an amended version of class- action lawsuits that were filed against the company, its directors and other parties in the wake of last August's disclosures.
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(Len Boselovic can be reached at lboselovic@post-gazette.com or 412-263-1941. )
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World Health Alternatives, Inc. Names Bruce C. Hayden as New Chief Financial Officer
Wednesday July 13, 11:04 am ET
PITTSBURGH--(BUSINESS WIRE)--July 13, 2005--World Health Alternatives, Inc. (OTC BB: WHAI - News), a premier medical staffing company that provides medical, professional and administrative staffing services to the healthcare industry, today named Bruce C. Hayden, CPA, CIA, as its new Chief Financial Officer.
Mr. Hayden brings to World Health more than 20 years of management experience with both publicly traded and privately held companies. Beginning in 1983, he spent nine years in public accounting with BDO Seidman, LLP and other public accounting firms in Richmond, Virginia. In 1992, Mr. Hayden entered the home healthcare industry as Chief Internal Auditor of First American Homecare, the largest privately held company in the homecare industry at the time. He subsequently joined MedShares, Inc. in 1994 as CFO and EVP of Financial Operations. Mr. Hayden also served as CFO of Columbia Homecare Group, an operating division of HCA Inc. (NYSE: HCA - News) that had over 500 locations and earned over one billion dollars annually in revenues. In 1999, Mr. Hayden became CFO of UroCor, Inc., which was a NASDAQ-listed company at the time and a leading diagnostic laboratory and disease management company in the field of urology. His principal focus with UroCor included investor relations, SEC reporting, operational infrastructure and performance metrics analysis, earnings performance and accelerated cash collections. He was primarily responsible for the negotiations and merger transaction between UroCor and Dianon Systems, Inc., which culminated in November 2001 with UroCor's shares receiving a benchmark valuation in its industry sector at that time.
Most recently, Mr. Hayden served as CFO of Xybernaut Corporation (XYBR.PK), a provider of mobile computing products and services. Prior to that role, he was the CFO of Galt Associates, Inc., a software product and consulting services company that services many of the top 25 international pharmaceutical companies.
"We are extremely pleased to welcome Bruce to World Health's management team. He brings a broad base of financial and operational experience to World Health, as well as a solid reputation among the financial community. We believe that his background with high growth companies, including his significant experience with mergers, acquisitions and integrations, will complement our current management team and strengthen World Health," said Richard McDonald, World Health's President.
Mr. Hayden commented, "I am very impressed with World Health's business model and management team. I'm looking forward to using my skills and experience to enhance the Company's future earnings and already outstanding growth potential."
Mr. Hayden earned a B.S. degree in Business Administration from East Carolina University in 1983 and is a Certified Public Accountant (CPA) and Certified Internal Auditor (CIA). He is married with five children, and will be relocating to the Pittsburgh area to join the Company's corporate office.
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