Malcolm “Tadd” McVay, who received five years’ probation for playing a role in HealthSouth’s securities fraud, was back in federal court this week in another criminal case. On Thursday he pleaded not guilty in the U.S. District Court for the Northern District of Alabama to charges he made illegal bank deposits totaling $182,000.
McVay also waived his right to hear the grand jury indictment filed in late August that accuses him of making transactions of a certain amount so that they wouldn’t have to be reported to the government. From August to October of last year, he allegedly made 24 deposits in his personal bank account — some of them on the same day — in amounts that ranged from $4,000 to $9,000. Any single deposit of more than $10,000 requires a bank to file a currency-transaction report known as a suspicious-activity report.
McVay’s attorneys claim he was putting the money in the bank for his 20-year-old daughter, who is in college, and had no intention of violating the law. “He was taking steps to liquefy his assets and convert them to cash,” Thomas Spina, an attorney at Fawal & Spina, told CFO.com. Spina said McVay was being careful to avoid attracting attention to himself because he fears going to jail. McVay’s sentence in the HealthSouth case is currently under appeal by government prosecutors, who think it is too lenient, his attorneys said.
McVay’s current case probably would not have reached a grand jury indictment if it weren’t for his background, they added. Robert McLean, McVay’s other attorney, said the government rarely, if ever, pursues these types of cases. McVay did not realize that the way he made the deposits could trigger a criminal charge, his attorneys added. “There are some mental issues he has that we will explore,” Spina told CFO.com. “He was merely trying not be recognized by the people in the bank.”
The government has seized the $182,000, the attorneys said. If the sentencing guidelines are followed and McVay is found guilty, he would likely get probation, they added.
McVay was one of five CFOs charged in connection with HealthSouth’s $2.7 billion accounting scandal. Finance chief at the company for only four months, he pleaded guilty to conspiracy to commit wire and securities fraud and filing false financial reports. In 2005 U.S. District Judge U.W. Clemon commended McVay for his cooperation with prosecutors and for his “exemplary record” as a single father. He was sentenced to five years of probation. That sentence was thrown out by an appeals court but reinstated this past February.