While it seems unlikely that it will ever get paid, the penalty is in place: HealthSouth CEO Richard Scrushy has been hit with a staggering $2.88 billion fine in a lawsuit brought by angry shareholders.
HealthSouth executives substantially exaggerated company earnings in an effort to boost stock value. The judgment includes excess debt costs faced by the company due to the accounting chicanery, overpaid salaries and bonuses, taxes on non-existent earnings and the expense of having to reconstruct badly falsified books.
The shareholders contended, and a state judge agreed, that Scrushy was responsible for the accounting fraud that almost capsized the company. In his trial, Scrushy had argued that he wasn't aware of the deception brewing within HealthSouth, and said that he wasn't involved, despite his reputation as a detail-oriented manager.
Scrushy, who is already serving a prison term on a federal bribery conviction, has said that he plans to appeal to the Alabama Supreme Court.
To learn more about Scrushy's situation:
- read this Modern Healthcare piece (reg. req.)
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