Healthsouth Accounting Scandal Essay

2360 Words 10 Pages
HealthSouth Accounting Scandal

HealthSouth is the one of the largest providers of inpatient rehabilitative healthcare services in the U.S. HealthSouth is fully operational in 26 states across the United States and also in Puerto Rico. HealthSouth serves patients in various settings such as; inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellite clinics and home health agencies. HealthSouth’s hospitals are able to provide an advanced care to patients that are recovering from neurological disorders, orthopedic, cardiac and pulmonary conditions, spinal cord injury, and amputations. HealthSouth’s corporate is office is located at 3660 Grandview Parkway Suite 200, Birmingham, Alabama 35243.
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Then on November 4, 2011, Mr. Richard Scrushy the ousted leader of HealthSouth was indicted on charges that he directed a $2.7 billion fraud which designed to inflate the company’s stock prices to fund his super-luxurious lifestyle. Mr. Scrushy had purchased items like a Lamborghini, a 92-foot yacht, a private jet, paintings by Renior as well as Picasso, and a mansion surrounded by water. Next a Delaware judge on November 23, 2003, ordered Scrushy to repay $25 million in loans that he obtained from the company in 1999. When you look at his salary in 2002, it included 3 million in salary, 10 million in bonus pay, and 99.3 million in stock sales. It should not have been difficult for him to pay the $25 million he was ordered to repay from 1999. From 1996 through 2002 it was later discovered by the government that HealthSouth had reported 2.74 billion in phony profits.
In January 2004 the lawyers representing the former HealthSouth Corp. chief Richard Scrushy filed court motions that posed questions about the ability of the grand jury’s fairness. The grand jury that had indicted Scrushy and demanded additional information from prosecutors was under attack. Meanwhile, in July of 2004 a grand jury indicted two of the former HealthSouth Corp executives Robert Thomson and James Reilly both for a bribery scheme that included the company’s $50 million contract to run a hospital in the country of Saudi Arabia.
September 28, 2004, Prosecutors said that the government

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