Government Official: Former HealthSouth CEO to Face Charges

By: Associated Press
By: Associated Press

Federal prosecutors contend former HealthSouth CEO and chairman Richard Scrushy was involved in fraud aimed at propping up the medical care company's stock price.

A federal official who spoke on condition of anonymity says the grand jury indictment against Scrushy will be unsealed tomorrow in Birmingham. The official declined to reveal the exact nature of the charges.

Fifteen former HealthSouth employees, including all five chief financial officers, have already pleaded guilty to criminal fraud charges since the Justice Department investigation began in March.

The government contends that Scrushy and HealthSouth inflated company earnings by at least $2.5 billion to make it appear the company was meeting expectations of Wall Street analysts. Scrushy has blamed the fraud on others in the company.

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