Accounting & Tax

Five Years for HealthSouth Ex-CFO Owens

His sentence is roughly double that of the other four HealthSouth finance chiefs combined.
Stephen TaubDecember 9, 2005

Former HealthSouth chief financial officer William Owens, credited with cooperating with the prosecution in its case against his former boss, Richard Scrushy, was sentenced to five years in prison for his role in the company’s $2.7 billion accounting scandal, according to published reports.

His sentence — the same as former WorldCom CFO Scott Sullivan received after testifying against Bernard Ebbers — is pared down a bit from the eight years that the prosecution was seeking. For his part, Owens was hoping for no prison time at all, given his high level of cooperation.

Perhaps that was too much to expect, even though former HealthSouth CFO Malcolm “Tadd” McVay received probation. Three of the company’s other finance chiefs — Michael Martin, Aaron Beam, and Weston Smith — received one week, three months, and 27 months respectively.

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Owens was one of two former HealthSouth executives who told the Department of Justice about the fraud in 2003, according to several published reports. He wore a hidden microphone to secretly record conversations with Scrushy and later testified at trial. Scrushy was acquitted of all criminal charges earlier this year.

Owens also testified last month against former HealthSouth controller Hannibal “Sonny” Crumpler, who was convicted for his role in the fraud.

Owens, who showed no emotion at the sentencing, said in court that he was deeply sorry for ruining his marriage, career, and finances, according to the Associated Press. He was not fined because he would be unable to pay, U.S. District Judge Sharon Lovelace Blackburn reportedly stated.