Former HealthSouth executive gets prison time
BIRMINGHAM, Ala. — A former HealthSouth Corp. finance chief has been ordered to spend three months in federal prison for his role in the $2.6 billion financial fraud that nearly wrecked the company.
A judge on Tuesday sentenced former HealthSouth finance chief Tadd McVay despite McVay’s pleas to stay out of prison.
McVay, who had pleaded guilty a scheme to inflate earnings six years ago, served five years on probation and six months of house arrest. But the 11th U.S. Circuit Court of Appeals agreed with prosecutors that the penalty was too lenient, so U.S. District Judge Inge Johnson ordered McVay to prison.
The court docket Wednesday did not say when McVay must report to prison or where he would be sent.
“I’m incredibly sorry for anybody who was hurt by my actions,” McVay told Johnson in court. “I’m embarrassed for what it’s done to my family.”
McVay was among five finance chiefs who pleaded guilty to crimes while working under Richard Scrushy, the disgraced former HealthSouth CEO. The fraudulent reports, aimed at meeting Wall Street forecasts, were sent to federal regulators between 1996 and 2002.
Prosecutors asked Johnson to sentence McVay to 28 months in prison, but the judge said McVay’s involvement in the accounting fraud was less than others who received less time.
“Basically, Mr. McVay, to make it short and simple, when these three months are gone, it’s over,” Johnson told him.
McVay was hired by Scrushy. McVay has said he was promoted to chief financial officer at HealthSouth in late 2002 and signed a phony earnings statement rather than lose his job, which paid him $400,000 a year.
Scrushy was acquitted of criminal charges, but a judge ruling in a shareholder lawsuit last month held him liable for the fraud and ordered him to pay $2.9 billion in damages. When the fraud was uncovered in 2003, HealthSouth was nearly forced into bankruptcy.
Scrushy is serving almost seven years in prison after being convicted with former Gov. Don Siegelman in a state bribery conspiracy.
Information from: The Birmingham News, www.al.com/birminghamnews
Filed under Legal Proceedings, News, Shareholder Lawsuit | Tags: Ala., Alabama, bankruptcy, Birmingham, Criminal, Damages, fraud, Fraud And False Statements, North America, United States, Us-healthsouth-sentencing | Comment Below
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