HealthSouth Corp. says it has placed Chairman and CEO Richard Scrushy and CFO William Owens on administrative leave following federal allegations of accounting fraud.
The Birmingham, Ala.-based company, the nation's largest provider of both ambulatory surgery and rehabilitation centers, has been charged with a $1.4 billion accounting fraud by artificially inflating its earnings to meet Wall Street expectations.
In a release today, HealthSouth adds that it is cooperating with the Securities and Exchange Commission and the Department of Justice, which are making the allegations, and has formed its own committee to investigate the charges.
The HealthSouth board has named Joel Gordon, a current director, to be acting chairman and Robert May, another director, to be acting chief executive officer, the company says.
"We are going to dig out of these problems and take every available step to restore corporate credibility," May says in the release.