Accounting & Tax

Former HealthSouth Exec Avoids Prison

He will still spend six months under electronic monitoring, pay a $10,000 fine, and forfeit $750,000.
Stephen TaubJune 2, 2004

A former HealthSouth Corp. finance executive has been sentenced to five years’ probation for his part in the company’s accounting scandal, reported Reuters.

Kenneth Livesay, who had been an assistant controller and chief information officer at HealthSouth, received the light sentence as a reward for cooperating with law enforcement officials investigating the scandal, according to the wire service. However, he will still spend six months under electronic monitoring, pay a $10,000 fine, and forfeit $750,000.

“He has come forward with invaluable information. He has saved the government a lot of time,” Judge U.W. Clemon reportedly stated.

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Some observers have described the sentence as a slap on the wrist; after all, prosecutors were seeking five years of prison time for Livesay, not five years’ probation. “I always sentence on the low end of the guidelines when someone has cooperated,” Clemon added, according to Reuters.

Livesay had pleaded guilty to criminal fraud and wire fraud.

At last count, 15 former HealthSouth executives have pleaded guilty to various criminal fraud charges in the accounting scandal.

Former chief executive officer Richard Scrushy, who has pleaded not guilty to 85 criminal counts, is awaiting trial.