Thursday, September 14, 2006
The third time was the charm for federal prosecutors, who finally had a substantial prison term imposed on former HealthSouth CFO Michael Martin. Twice before, Martin, who cooperated in the case after pleading guilty, was sentenced for his role in the $2.7 billion fraud, receiving probation and then a seven-day term in prison. Martin was one of the five former HealthSouth CFOs who pleaded guilty, and he testified against former CEO Richard Scrushy when his comparatively light sentence was fodder for the cross-examination.
The government appealed each of the first two sentences, arguing that they departed too much from the Federal Sentencing Guidelines and were unreasonable. After the second reversal, the Eleventh Circuit reassigned the case to a different district court judge, and now Martin has been sentenced to three years in a federal correctional institution; he will serve about 30 months in prison and then be eligible for release to a half-way house. The case is a good example of how disparate sentences can be in white collar cases, especially when a defendant has cooperated to receive a lower sentence. An AP story (here) indicates that, while perhaps not satisfied with the new sentence, Martin has accepted it, quoting him as stating, "Finally you can put a period on it . . . I'm just glad it's over." (ph)