HealthSouth Moves to Fire CFO After Guilty PleaMar 27, 2003 | Wall Street Journal
HealthSouth Corp. is moving to fire suspended Chief Financial Officer William T. Owens, who pleaded guilty Wednesday to federal securities fraud and conspiracy charges in connection with an accounting scandal that has rocked the health-care giant.
Officially, Mr. Owens' termination is awaiting the completion of paperwork, said company spokesman Ernie Knewitz. But "for all intents and purposes he has been fired," Mr. Knewitz said.
Mr. Owens, however, remains a member of HealthSouth's board.
He can't be removed from that post unless he chooses to resign or is voted off at the next shareholder meeting, the date for which can't be set until the company resolves questions about its financial statements, Mr. Knewitz said.
Mr. Owens couldn't be reached for comment. An attorney representing Mr. Owens didn't immediately return a phone message.
Mr. Owens, 44 years old, was suspended March 20, along with Chief Executive Richard Scrushy, after federal authorities charged the company and some senior executives with artificially inflating profits in order to keep HealthSouth's stock price from falling.
As part of a plea bargain agreement with the U.S. Attorney in Birmingham, Ala., Mr. Owens pleaded guilty to fraud charges and faces a maximum of 20 years in prison for filing a false certification of financial statements with the U.S. Securities and Exchange Commission. He also faces additional prison time for two other charges.
Mr. Owens has worked at HealthSouth since 1986 in various capacities. He served as chief financial officer from February 2000 until August 2001 and returned to the post again in January after serving as chief operating officer and chief executive.
Mr. Owens is cooperating with the government's investigation of accounting fraud at HealthSouth, the nation's largest operator of rehabilitation hospitals.
Last week, former Chief Financial Officer Weston Smith plead guilty to similar charges of conspiracy to commit wire fraud and securities fraud. He faces a maximum of 10 years in prison for his false certification of results.
Mr. Scrushy hasn't been charged as part of the criminal investigation, but he has been charged by the SEC with accounting fraud.