HealthSouth Corp. Treasurer Malcolm McVay, 41, became the 10th individual to be charged in the federal investigation of the company and has agreed to plead guilty, the U.S. Justice Department said today. According to documents filed in U.S. District Court, Birmingham, Ala., McVay was charged with conspiracy to commit wire and securities fraud and with filing false information with the Securities and Exchange Commission. McVay joined HealthSouth in 1999 and worked in various capacities, including CFO and treasurer.
In other HealthSouth news, the general contractor for HealthSouth's partially built "digital hospital" in Birmingham, has filed suit against the rehabilitation chain seeking $22 million for work completed on the project. The $300 million hospital is about 40% complete, but HealthSouth has halted construction while the company's new management addresses the federal allegations of massive accounting fraud and negotiates payments with creditors. The company reportedly is interested in selling the facility. At deadline, neither HealthSouth officials nor officials with the contractor, Brasfield & Gorrie, Birmingham, could be reached for comment. The lawsuit was filed in Jefferson County Circuit Court, Birmingham. Billed by HealthSouth founder and former CEO Richard Scrushy as the "hospital of the future," the 219-bed facility has had a litigious existence so far. It was the subject of a heated legal battle between HealthSouth and two Alabama healthcare systems that contended the project didn't have proper certificate-of-need approval. An Alabama court gave the project the go-ahead last month, citing HealthSouth's already significant financial investment in the facility and saying the lawsuit was filed too late. -- by Julie Piotrowski