A HealthSouth CFO Finally Receives a Jail Sentence

Former HealthSouth CFO Weston Smith, who initially blew the whistle on the fraud at the company, received the only substantial sentence among its former officers who entered guilty pleas.  U.S. District Judge Robert Propst sentenced Smith to a 27-month term of imprisonment, which is a far cry from the seven-day sentence imposed on former CFO Michael Martin or the home confinement for the other former CFOs.  The disparity in the sentences is a result of different judges imposing the sentences, and apparently evaluating the culpability and cooperation of the defendants by different measures.  A press release issued by the U.S. Attorney's Office (here) discusses the sentencing.

Meanwhile, back at HealthSouth, Richard Scrushy launched a broadside at the company's current management, accusing them of not enhancing shareholder value and demanding that he be provided access to corporate records in his position as a member of the board of directors.  Scrushy remains the largest individual shareholder of HealthSouth, and never gave up his board seat, although he has been shunned by the rest of the directors who operate the company through a special committee that does not include Scrushy -- no great surprise there.  Scrushy looks like he's laying the groundwork for a return to the executive suite, assuming the SEC is no more successful than the U.S. Attorney's Office in its securities fraud case. A Birmingham News article (here) discusses Scrushy's criticism of HealthSouth's management. (ph)