Wade on Birmingham

Birmingham’s Biggest Crooks: The HealthSouth 16

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In August, we’re celebrating Birmingham’s Biggest Crooks, whether they be liars, thieves, extortionists, swindlers or thugs. A 30-part series running daily until Birmingham mayor Larry Langford’s Aug. 31 Oct. 19 federal trial. Thanks to Bhamwiki for helping with this project.

The HealthSouth 16

HealthSouthThe Securities and Exchange Commission accused Birmingham-based HealthSouth Corp. and its founder Richard Scrushy of a $2.7 billion accounting fraud in 2003. Two years later, Scrushy was acquitted on all 36 charges. But 16 HealthSouth officials were found guilty of fraud, conspiracy and other crimes.

Only eight were sent to prison for a total of 20 years and 2 months.

Angela Ayers, vice president of finance and accounting, pled guilty April 4, 2003, to conspiracy to commit wire fraud, securities fraud and filing false records; sentenced to 4 years’ probation including 6 months’ home detention and $2,000 fine.

Aaron Beam, co-founder and chief financial officer, pled guilty May 6, 2003, to bank fraud; sentenced to 3 months in prison, 1 year probation, plus forfeiture of $275,000 and $10,000 fine. Founded the annual Beam’s Crawfish Boil in 1994 (now Schaeffer’s Eye Center Crawfish Boil).

Richard Botts, senior vice president in tax department, pled guilty Aug. 28, 2003, to falsifying company tax returns; sentenced to 5 years’ probation and 6 months’ home detention, plus forfeiture of $265,000 and $10,000 fine.

Jason Brown, vice president of finance, pled guilty in December 2003 to falsifying financial reports, sentenced to 1 year and 1 day in prison.

Hannibal “Sonny” Crumpler, CFO of HealthSouth spinoff Source Medical Solutions, convicted Nov. 18, 2005, of conspiracy and lying to auditors; sentenced to 8 years in Talladega Federal Correction Institution.

Cathy Edwards, vice president of asset management, pled guilty April 4, 2003, to conspiracy to commit wire fraud, securities fraud and filing false records; sentenced to 4 years’ probation including 6 months’ home detention and $2,000 fine.

Catherine Fowler, vice president in the treasury department, pled guilty Nov. 24, 2003, to hiding the sale of another public company’s stock; sentenced to 2 years’ probation and $5,000 fine.

Emery Harris, assistant controller, pled guilty on March 31, 2003, to fraud; sentenced to 5 months in prison and 3 years’ probation, including 5 months’ home detention, plus $3,000 fine and $106,500 in restitution.

Will Hicks, vice president of investments, pled guilty Aug. 29, 2003, to conspiring to make false statements to auditors and maintain false books and records; sentenced to 3 months’ home detention and 2 years’ probation, plus forfeiture of $50,000 and a $2,500 fine.

Kenneth Livesay, chief information officer, pled guilty April 4, 2003, to conspiracy to commit wire fraud, securities fraud and filing false records; sentenced to 5 years’ probation including 6 months’ home detention, plus forfeiture of $750,000 and $10,000 fine.

Michael Martin, CFO, pled guilty May 1, 2003, to conspiracy to commit wire fraud and securities fraud and to filing false records; sentenced to 3 years in prison, plus forfeiture of $2.4 million and $50,000 fine.

Malcolm “Tadd” McVay, CFO, pled guilty May 1, 2003, to conspiracy to commit wire fraud and securities fraud and to filing false records; sentenced to 5 years’ probation including 6 months’ home detention, later sentenced to 3 months in prison.

Rebecca Kay Morgan, group vice president of accounting, pled guilty April 4, 2003, to conspiracy to commit wire fraud, securities fraud and filing false records; sentenced to 4 years’ probation including 6 months’ home detention, plus $2,000 fine and $235,000 in restitution.

William Owens, CFO, pled guilty March 27, 2003, to fraud; sentenced to 5 years in prison.

Weston Smith, CFO, pled guilty March 19, 2003, to conspiracy to commit wire and securities fraud and to having knowingly certified false statements with the Securities and Exchange Commission; sentenced to 2 years 3 months in prison, 1 year probation, plus forfeiture of $1.5 million.

Virginia Valentine, assistant vice president of finance and accounting, pled guilty April 4, 2003, to conspiracy to commit wire fraud, securities fraud and filing false records; sentenced to 4 years’ probation including 6 months’ home detention and $2,000 fine.

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2 Yips for “Birmingham’s Biggest Crooks: The HealthSouth 16”

  1. K. Whitmire
    Sunday, August 30, 2009, 7:39 pm
    1

    This series has been fun reading. I learned a lot I didn’t know. I remembered a lot I had forgotten.

    A couple you might have included if you’d had the room …

    1.) Eric Robert Rudolph. Yes, he’s not technically from here, but he definitely left his mark.

    2.) Jack Swan. You couldn’t have had this sewer fiasco without Jack as Director of Environmental Services.

  2. Wade
    Sunday, August 30, 2009, 8:15 pm
    2

    Thanks! It was a great learning experience for me, too.

    We’ll save Eric and Jack for the Crooks Swimsuit 2010 Calendar.

    And thanks for featuring me on the “What the Weekly’s Reading” bar. Good reads all around.

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