HealthSouth Corporation

The federal government charged rehabilitation giant HealthSouth Corporation and Chairman Richard Scrushy with civil accounting fraud.

The company is accused of overstating earnings by at least $1.4 billion since 1999.

The Securities and Exchange Commission, which filed the charges in federal court in Birmingham, suspended trading in the company for two days.

Meanwhile, the Justice Department said a former executive at HealthSouth, 42-year-old Weston Smith would plead guilty to criminal fraud charges.

The SEC said the Birmingham based company inflated its results at Scrushy's insistence to make it appear it was meeting or exceeding Wall Street expectations.

HealthSouth spokeswoman Kristi Gilmore said the company had no immediate response to the charges. It has denied wrongdoing in the past.

HealthSouth is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitation services.

HealthSouth has a rehabilitation center located in Dothan.


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