Health-care firm's CEO arrested for violating new law

By  On  November 5th, 2003

BIRMINGHAM, Ala. (AP) — Former HealthSouth chief Richard
Scrushy was arrested yesterday on charges of falsifying the books
at the health-care chain by $2.7 billion to enrich himself —
the first CEO charged under a new federal law prompted by the wave
of corporate accounting scandals.

Prosecutors said that because Scrushy’s compensation was
tied in part to HealthSouth’s performance, he pocketed $267
million in salary, bonuses and stock options and surrounded himself
with yachts, luxury cars, fine art and jewels.

Scrushy, 51, pleaded innocent to the 85 counts — which
included fraud, conspiracy and money-laundering — and was
released on $10 million bail secured by his three homes and 360
acres of plantation property.

Fourteen former HealthSouth employees, including all five of the
conglomerate’s former chief financial officers, already have
pleaded guilty to fraud charges since the Justice Department began
investigating the coast-to-coast chain of surgery and
rehabilitation clinics in March. Another person has agreed to plead
guilty.

The indictment, returned Oct. 29 and released yesterday, had
been sealed amid government claims that Scrushy’s bodyguards
had weapons and spy equipment that intimidated witnesses.

The charges against Scrushy carry a total of 650 years in prison
and $36 million in fines, though if convicted he would get far less
under federal sentencing guidelines. A trial date of Jan. 5 was
set.

The charges include falsely attesting to the accuracy of
corporate statements. Scrushy becomes the first CEO charged under
the Sarbanes-Oxley Act, passed in reaction to the wave of scandals
that engulfed Enron, WorldCom and giant corporations.

 

 

 

 

 

 

 

 

Printed from www.michigandaily.com on Sat, 26 May 2012 21:48:03 -0400