3rd Ex-HealthSouth CFO Charged With FraudApr 8, 2003 | AP
A third former chief financial officer of HealthSouth Corp. was charged with criminal fraud in a widening accounting scandal at the rehabilitation giant, prosecutors said Tuesday.
Michael Martin, who worked as CFO from October 1997 to February 2000, is accused of conspiracy to commit wire fraud and securities fraud, and falsifying financial information.
Martin, 42, is expected to plead guilty this week and is cooperating with authorities investigating the company, U.S. Attorney Alice Martin said in a statement Tuesday.
Eight former HealthSouth executives, including former CFOs Weston Smith and William T. Owens, previously pleaded guilty and are cooperating with investigators who say the company has overstated earnings by $2.5 billion since 1997 to meet Wall Street expectations.
HealthSouth founder Richard Scrushy, fired last week as chief executive and chairman, is the target of a criminal investigation. He has denied wrongdoing.
Michael Martin went to work at HealthSouth in 1989, working in the accounting department in various jobs before his promotion and departure.
The charges accuse him of following orders from the CEO to make sure the company's earnings met Wall Street's expectations and, by doing that, enriching himself and others.
"Mr. Martin's plea demonstrates you cannot leave a corporate fraud conspiracy by simply walking out the corporation's front door," Alice Martin said.
HealthSouth, based in Birmingham, describes itself as the nation's largest provider of outpatient surgery, diagnostic and imaging and rehabilitative health care services, with approximately 1,800 facilities in all 50 states, Puerto Rico, the United Kingdom, Australia and Canada. The company, founded in 1984, employs more than 51,000 workers.