William Owens, a former HealthSouth Corp. chief financial officer and chief operating officer, said then-top executive Richard Scrushy ordered that the company's earnings and revenue be inflated, according to documents unsealed by a U.S. District Court judge in Birmingham, Ala.
The documents were part of an affidavit requesting a search warrant for HealthSouth's Birmingham headquarters and were unsealed after Scrushy's defense asked for access to the information. Scrushy is expected to go to trial in January on multiple criminal charges related to alleged multibillion-dollar accounting fraud at the company.
The affidavit includes an FBI report on testimony by Owens and another former CFO, Weston Smith. Both men have pleaded guilty to fraud-related charges and are awaiting sentencing. Smith said he heard secondhand that Scrushy asked others to inflate numbers.
According to the affidavit, Scrushy sold HealthSouth stock in 1997 and told Owens to inflate revenue for at least one year so Scrushy could avoid being sued.