Five admitted participants in the $2.7 billion HealthSouth fraud scheme were sentenced in federal court in Birmingham, Ala., Wednesday, though only one received jail time.
Birmingham-based U.S. Attorney Alice Martin already has appealed the sentences on the grounds that U.S. District Court Judge Inge Johnson was too lenient on the defendants. Martin was not immediately available for comment.
Former HealthSouth Vice President of Finance Emery Harris, who pleaded guilty to conspiracy and to willfully falsifying company financial records, was sentenced to five months in prison on each count, though the terms will run consecutively. Harris also received three years of supervised release with five months of unsupervised home detention, a $3,000 fine.
Additionally, Johnson ordered Harris to forfeit $106,500 he earned from the illegal activity.
The other four sentenced yesterday--former Accounting Vice Presidents Angela Ayers and Cathy Edwards, former Group Vice President Rebecca Kay Morgan and Assistant Vice President Virginia Valentine--each were given four years of probation with six months of unsupervised home confinement, plus $2,000 fines.
Morgan also must forfeit $235,000.
The four pleaded guilty in April to conspiracy to commit wire and securities fraud. Edwards and Morgan also admitted to wire fraud.
All told, 15 former executives of the Birmingham-based outpatient rehabilitation and surgery center operator have admitted guilt in a scheme to bilk investors by overstating earnings by $2.7 billion and inflating the value of company assets by $800 million in public disclosures, according to U.S. officials.
HealthSouth founder and former Chairman and CEO Richard Scrushy faces an 85-count criminal indictment, but he vehemently denies any involvement in the alleged fraud.