Risk Management

Probation, Again, for HealthSouth Exec

Richard Botts "was a late-comer in an ongoing conspiracy," maintains the judge, "not one of the inner circle."
Stephen TaubSeptember 20, 2005

Upon further review, the original sentence pronounced on a former HealthSouth Corp. executive remains the same. U.S. District Judge U.W. Clemon again sentenced former senior vice president for tax, Richard Botts, to probation.

Botts had pleaded guilty to conspiracy, mail fraud, and falsifying records for his part in the health care company’s $2.7 billion accounting fraud. Earlier this year, Judge Clemon had originally sentenced him to five years’ probation and six months’ home detention, plus a $10,000 fine and a forfeiture of $265,000. Prosecutors had sought a sentence of more than three years in prison.

In June, the 11th U.S. Circuit Court of Appeals vacated the sentences of Botts and former CFO Michael Martin, who also got probation. The appeals court ruled that Clemon did not give any reasons for his “extraordinary departure” from federal sentencing guidelines.

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As it turns out, Clemon stuck with his original decision, which was his prerogative. This time, however, he explained his thinking. Botts “was a late-comer in an ongoing conspiracy,” maintained the judge, according to Reuters, “not one of the inner circle.”

Clemon also cited Botts’s cooperation in the investigation of former chief executive officer Richard Scrushy, who was later acquitted of fraud charges related to the accounting scandal. “Where the head honcho is found not guilty,” Clemon reportedly said, incarceration of a minor participant “might actually encourage disrespect of the law.”

Martin is also scheduled for resentencing this week.