HealthSouth’s Legal Odyssey Continues | AccountingWEB

HealthSouth’s Legal Odyssey Continues

On June 22, 2005, the federal appeals court in Atlanta, Georgia, vacated the probation sentences of former HealthSouth executives Mike Martin and Richard Botts sending the case back to a lower court for resentencing. On the same day, the Alabama jury deliberating in the trial of Richard Scrushy, founder and former CEO of HealthSouth, was ordered to start their deliberations over after a sick juror was dismissed and replaced by an alternate.

In overturning the sentences of Martin and Botts, the federal appeals court cited the lack of reasons given by the lower court in imposing lighter sentences on the former executives who pled guilty to accounting fraud at the health-care company. Martin, who also testified against Scrushy, was sentenced to 60 months probation and two months home detention with sentences to run concurrently. Botts was sentenced to five years of probation and six months of home detention. According to the Associated Press, under federal sentencing guidelines, Martin could have faced between 108 to 135 months in prison while Botts could have faced up to 60 months in prison.

“The district court failed to specify any reasons, either orally or in his written statement of reasons, for this extraordinary departure,” the Associate Press reports the opinion from the three-judge panel as saying.

Alabama Associated Press reports that prosecutors say the two former executives cooperated and assisted in building the case against Scrushy. The reconstituted jury began deliberations after U.S. District Judge Karon Bowdre replaced a male juror with a male alternate juror. U.S. Attorney Alice Martin told the Associated Press that the judge questioned the 11 original jurors to ascertain whether they were willing and able to begin deliberations again with a new member. All were, and agreed to extend their workday in hopes of reaching a verdict in a trial that began in January.

If convicted, Scrushy faces life imprisonment and millions of dollars in fines.

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