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Timeline of Accounting Scandal at HealthSouth

Compiled by washingtonpost.com staff
Thursday, September 30, 2004; 12:33 PM

HealthSouth, the largest U.S. operator of rehabilitation-hospitals, is under investigation by the Securities and Exchange Commission and the Justice Department for allegedly overstating earnings by $2.5 billion since 1999.

Fifteen HealthSouth employees, including all five former chief financial officers, have pleaded guilty to criminal charges. Former CEO Richard M. Scrushy has denied wrongdoing. He will appear before the House Energy and Commerce Committee on Oct. 16, but is expected to invoke his Fifth Amendment right against self-incrimination.


Former HealthSouth CEO Richard Scrushy, 50, was a self-made son of the new South, a former teenage parent who hauled himself up from a menial job to become an emperor of the new economy. (Steve Barnette - AP)

Scrushy has refused the company's request for his resignation and remains a non-active board member of HealthSouth.
SEC.gov: SEC Charges HealthSouth

Timeline

Sept. 29, 2004: Federal prosecutors announce new perjury and obstruction-of-justice charges against HealthSouth Corp. founder Richard M. Scrushy, accusing him of lying to regulators and urging a subordinate to lie to support his story.

Sept. 28, 2004: A prosecutor says the government won't seek more prison time for former HealthSouth Corp. assistant controller Emery W. Harris, who is to be resentenced after serving five months for fraud.

July 1, 2004: A grand jury indicts former HealthSouth Corp. executives Robert E. Thomson and James C. Reilly in a bribery scheme involving the company's $50 million contract to run a hospital in Saudi Arabia.

Jan. 26, 2004: Lawyers for former HealthSouth Corp. chief Richard M. Scrushy files court motions that raise questions about the fairness of the grand jury that indicted him and demanding more information from prosecutors.

Nov. 26, 2003: Ousted HealthSouth Corp. chief Richard M. Scrushy is ordered by a Delaware judge to repay $25 million in loans he took from the company in 1999.

Nov. 4, 2003: Ousted HealthSouth chief Richard M. Scrushy is indicted on charges that he directed a $2.7 billion fraud designed to boost the company's stock price and to bankroll an extravagant lifestyle that included a Lamborghini, a 92-foot yacht, and paintings by Picasso and Renoir.

Oct. 16, 2003: Richard M. Scrushy refuses to testify before Congress, angering lawmakers who accused him of being at the center of an organization whose employees were intimidated and threatened if they challenged him.


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