While the Scrushy verdict had to be a blow to prosecutors, there are more fish to fry at HealthSouth before the company will be free and clear from the taint of executive corrruption. Sentencing lies ahead for two former company executives and another two are getting ready for trial. Meanwhile Healthsouth is cooperating with the governmental investigation and attempting to get business back on track.

Via the Washington Times:

HealthSouth case presses ahead

By Jay Reeves
ASSOCIATED PRESS
July 4, 2005

BIRMINGHAM, Ala. -- Federal prosecutors aren't finished with HealthSouth Corp., despite the acquittal of ousted Chief Executive Officer Richard Scrushy in a $2.7 billion accounting scandal. Two former executives who pleaded guilty in the accounting scheme are set for sentencing this summer, and two more indicted in the fraud are awaiting trial in Birmingham, where jurors last week found Mr. Scrushy not guilty.

HealthSouth, meanwhile, is feeding information to prosecutors as it sorts out the aftermath of the financial debacle, and U.S. Attorney Alice Martin said her office still is investigating the long-running fraud at the rehabilitation and medical services chain...

Beam, the company's first finance chief, pleaded guilty to bank fraud in the scheme and was the first of five chief financial officers (CFOs) to take the stand and tie Mr. Scrushy to the fraud. Jurors rejected all of that testimony, telling reporters afterward that all five men had credibility problems. Beam is scheduled to be sentenced July 25 for his role in the fraud. Defense attorney Donald Briskman said Beam fulfilled his part of the plea deal by taking the stand against his former colleague, and he expects prosecutors to honor their end of the bargain by recommending a lighter sentence...

...Beam and Will Hicks, a one-time HealthSouth vice president who also testified against Mr. Scrushy and also is set for sentencing July 25, could receive probation based on the punishment handed down to 10 other HealthSouth executives sentenced so far. Only one was sent to prison, and that term was for only five months...

...The 11th U.S. Circuit Court of Appeals last month ordered a judge to explain his light sentences for two more former HealthSouth workers who pleaded guilty, former CFO Mike Martin and Richard Botts, a vice president, but the court didn't order tougher punishment for the two, who received probation. Still, prosecutors are renewing their request for prison for Martin and Botts.

Meanwhile, former HealthSouth president and director Jim Bennett and Hannibal "Sonny" Crumpler, a division controller, are awaiting trial. Mr. Bennett's attorneys have asked for a date as early as November, and Mr. Crumpler's case is set to begin Sept. 12.

HealthSouth last month agreed to pay $100 million to settle the civil fraud charges filed by the SEC, and in January it reached a $325 million settlement with the Justice Department to resolve issues linked to Medicare billing practices.

Full article appears here.

-- MDT

Labels: 2006, Health South