HealthSouth will pay the money to the U.S. Postal Inspection Service's consumer fraud division and has agreed to enact stronger internal controls over its finances. The company will remain on probation until 2009.
The deal brings an end to an investigation that began in early 2003, when federal investigators raided the company's headquarters. Over the last three years, 15 executives have pleaded guilty or been convicted of participating in the accounting fraud.
Over the last year, HealthSouth agreed to accept responsibility for the executives' actions and has paid $100 million to settle civil claims filed by the Securities and Exchange Commission, as well as $445 million in stock, cash and warrants to settle claims brought by investors.
"Prosecution would likely have pushed this company into bankruptcy," said U.S. attorney Alice H. Martin, in a statement. "By taking this non-prosecution approach, [the] jobs of thousands have been saved and the company has an opportunity to rebuild shareholder value."
Last year, a jury acquitted HealthSouth founder and former chief executive Richard Scrushy of participating in the fraud. In an unrelated case, Scrushy is on trial for charges that he bribed a former governor of Alabama.
Separately, HealthSouth agreed to pay the government $325 million to settle numerous allegations that it defrauded Medicare and other federal health programs.
Previously on WebCPA:
HealthSouth Settles Investor Suits for $445M (Feb. 24, 2006)
HealthSouth Responds with Suit of Its Own (Dec. 30, 2005)
Next Scrushy Trial Set for 2007 (Dec. 6, 2005)
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