Reputation management was the name of the game last week for HealthSouth Corp.'s former chief as federal prosecutors accused more executives of criminal behavior. As the U.S. attorney's office in Birmingham, Ala., announced that two additional former company executives would plead guilty to criminal charges related to a kickback scheme, company founder Richard Scrushy, indicted on 85 counts of alleged fraud, launched a TV show in Birmingham.
The charges against Vincent Nico, a former vice president at HealthSouth, and Thomas Carman, a former executive vice president, stem from HealthSouth's agreement to provide staffing and management services for a 450-bed inpatient rehabilitation hospital in Riyadh, Saudi Arabia. Nico, 47, agreed to forfeit $1 million he received in kickbacks and bonuses and will face up to 20 years in prison and a $250,000 fine after pleading guilty to wire fraud. Carman, 52, faces up to five years in prison and a $250,000 fine after pleading guilty to making false statements to the FBI. Under the company's contract with the Sultan Bin Abdul Aziz Foundation, the Saudi organization that built and owned the hospital, HealthSouth was to receive $50 million over the course of a five-year contract. According to the U.S. District Attorney's office, HealthSouth-against the advice of legal counsel at the time-consented to pay the foundation's director $500,000 annually for five years in return for his agreement to execute the contract on behalf of the foundation.
To conceal the alleged bribery, HealthSouth officers, including Nico and Carman, arranged a bogus consulting contract for the Saudi foundation's director general with a HealthSouth affiliate in Australia, according to federal prosecutors. The charges against Nico contend he accepted $125,000 per year from the foundation's director out of the $500,000 paid to the director, for a total of $375,000 in undisclosed payments from 2001 to 2003. Nico also received $631,502 from HealthSouth as a bonus payment he demanded based on his claim that he secured and maintained the Saudi contract. The charges against Carman allege he made a false statement to the FBI when he said during an interview that the consulting contract was intended to be a legitimate arrangement under which real services were to be provided.
"We continue to investigate various aspects of financial practices by former and current HealthSouth employees, and (last week's) pleas demonstrate our efforts to follow important leads," said U.S. Attorney Alice Martin in a news release. She said other charges related to the kickback scandal may be forthcoming.
While Martin was preparing to announce the criminal charges against the former executives, ousted company founder Richard Scrushy, whom federal prosecutors allege directed the $2.7 billion accounting scandal, began hosting a local morning TV show, "Viewpoint," which according to the show's Web site, will discuss news stories "truthfully and accurately, free from the bias of mainstream media."
Scrushy bought the daily half-hour time slot at 7: 30 a.m. for 12 months on Birmingham station WTTO, Channel 21, an affiliate of the WB Television Network. He is co-hosting the morning show with his wife, Leslie. The first program featured an interview with the former chief justice of the Alabama Supreme Court, Roy Moore, who was thrown off the bench for refusing to remove a monument of the Ten Commandments from the high court's rotunda.
The purpose of "Viewpoint," according to the show's Web site, morningviewpoint.com, is "to be a forum in which leaders and visionaries of (the Birmingham) community and nation can convey their ideas, dreams and goals to the people of our community." The show begins each morning with Leslie Scrushy reading a devotional prayer.
Other episodes that aired last week had strong religious themes, with guests such as the Rev. Vic Smith, who spoke on the warning signs of teen depression and suicide, and one show on the topic "Scripture Candy-Top 10 Fastest Growing Businesses in Birmingham."
Scrushy's criminal trial is set to begin in Birmingham on Aug. 23. Scrushy spokesman Charlie Russell said Scrushy would not comment for this story.