HealthSouth

By: Associated Press
By: Associated Press

A former finance chief at HealthSouth testified that he tearfully told then-CEO Richard Scrushy of his desire to quit during a huge fraud. A move he said led Scrushy to agree to lower earnings estimates.

Mike Martin, in his fourth day of testimony, said he decided to turn in his resignation in September 1999 because the company's cash flow was more than $500 million short of projections.

Martin said he decided again to quit in February 2000 after Scrushy hyped stock prices at an investors' conference in New York. He said the action violated an agreement to let the stock price cool until the fraud could be stopped.

Prosecutors contend Scrushy orchestrated a conspiracy to inflate HealthSouth earnings for seven years and made millions off the scheme.

The defense contends former Scrushy aides concocted the conspiracy on their own.

After his resignation as CFO, Martin said Scrushy named him an executive vice president for investments, a position he held for a few weeks before leaving for good.


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