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US: Another Former HealthSouth Exec Gets Jail Time

by Verna GatesReuters
December 21st, 2005

A former HealthSouth Corp. finance executive was sentenced to a year and a day in prison on Wednesday for his part in the multibillion-dollar accounting fraud that rocked the company.

Jason Brown, 36, a former vice president of finance for the Birmingham-based, health-care company, was ordered to report to prison on February 1.

He was also ordered to serve two years of supervised release following his prison term.

"Executives who commit corporate fraud are not more than common thieves wearing suits and wielding pens as their weapons while bilking millions from investors," U.S. District Court Judge Sharon Blackburn said in handing down the sentence.

Brown was one of 15 former HealthSouth executives who pleaded guilty to a variety of fraud charges after it was discovered that the company had been reporting inflated earnings for years.

Forensic accountants working for HealthSouth's new management put the extent of the fraud at nearly $4 billion.

Former HealthSouth Chief Executive Richard Scrushy, who had been accused of directing the fraud, in June was found not guilty of all charges by a Birmingham jury even though five former finance chiefs testified that he was aware of and involved in the bogus accounting.

Williams Owens, one of Scrushy's longtime lieutenants and one of the ex-CFOs, received the harshest sentence, getting five years in prison. But most who had pleaded guilty received little or no jail time.

"The magnitude of the fraud is mind boggling," said Blackburn, adding she was sorry the sentences of the others handed down by different judges were not more severe.

Before the sentencing, Brown told the court that he regretted his participation in the fraud every day.

"I made two very poor decisions in 2002. I learned a very painful and difficult lesson," he said.

Blackburn responded: "The fact that you have suffered weighs very little because it is a suffering of your own making."

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