Risk Management

No HealthSouth Prison Time?

Another sentence, but no incarceration, for what the judge calls ''a relatively minor thing.''
Stephen TaubJune 4, 2004

Starting to discern a pattern?

For the fourth time this week, a judge chose not to imprison a former HealthSouth Corp. executive who pleaded guilty to a role in the company’s massive accounting fraud.

Catherine Fowler, a former HealthSouth cash manager and vice president of treasury, was sentenced to two years’ probation and fined $5,000, according to Reuters. She had pleaded guilty to conspiracy to deceive auditors and maintain false books and records.

Prosecutors maintained that Fowler cost the company and shareholders $27 million, reported the Associated Press, by making wire transfers to falsify a stock sale. However, U.S. District Judge U.W. Clemon agreed with the defense that Fowler’s actions were an insignificant part of a broader fraud that didn’t result in losses, added the AP. “In the scheme of things, this was a relatively minor thing,” Clemon reportedly observed.

A clearly dismayed Richard Wiedis, a trial attorney for the Department of Justice, told the wire service: “The fraud of HealthSouth may be the greatest corporate fraud ever considered in the state of Alabama. I do not see how this could be considered minor.”

The AP also reported that Fowler has agreed to testify against former chief executive officer Richard Scrushy.