Former executives of HealthSouth Corp., Birmingham, Ala., allegedly appropriated $561,728 of the company's money to pay for their or other executives' legal fees just days before pleading guilty to securities fraud. A HealthSouth spokesman said the company would seek repayment of the funds at a later date. HealthSouth founder and former CEO Richard Scrushy, who has been named in a Securities and Exchange Commission lawsuit against the company but has not been criminally charged, did not receive any of the appropriated funds. According to HealthSouth, the funds were used to pay legal fees for 10 of the 15 executives who have pleaded guilty so far in the government investigation of alleged accounting fraud at the company. "We believe we're entitled to be repaid for those funds, but we're not taking action at this point so as to not complicate the ongoing government investigation," the HealthSouth spokesman said. Meanwhile, the House Energy and Commerce oversight and investigations subcommittee will hold another hearing later this week in its own investigation of problems at HealthSouth. -- by Julie Piotrowski
HealthSouth to seek return of execs' legal fees
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.