FBI Confirms Probe of HealthSouthFeb 6, 2003 | AP HealthSouth Corp., already facing several lawsuits and an investigation by the Securities and Exchange Commission, said Thursday federal prosecutors have issued a subpoena for documents related to trading in the company's stock.
An FBI spokesman, Craig Dahle, also confirmed that agents questioned HealthSouth employees Wednesday and Thursday.
Chief executive Richard M. Scrushy said in a news release that he does not believe HealthSouth or anyone related with the company had done anything wrong.
"We have cooperated with all requests for information from government authorities, and we will continue to do so," Scrushy said.
Dahle wouldn't say whether the investigation could lead to charges against HealthSouth officials and intensify problems for the company.
HealthSouth, one of the nation's largest operators of rehabilitation clinics and outpatient surgery centers, is being investigated by the Securities and Exchange Commission and is a defendant in several shareholder lawsuits accusing company executives of trading on inside knowledge.
HealthSouth has confirmed the SEC is looking into the timing of an Aug. 27, 2002, announcement that reduced Medicare payments would cut the company's pretax profits by $175 million a year.
Although the SEC hasn't commented on the scope of its investigation, HealthSouth said Thursday the documents sought by federal prosecutors are similar to ones it provided earlier to securities regulators.
Scrushy has said he didn't know about the reduced Medicare payments before the Aug. 27 announcement, which sent HealthSouth shares tumbling by two-thirds in just days.
Scrushy's stock sales became the centerpiece of at least two dozen shareholder lawsuits filed against him and the company after the Aug. 27 announcement. Scrushy, who resigned as CEO and then was rehired last month has branded the lawsuits "frivolous."