Former HealthSouth executive Hannibal "Sonny" Crumpler has been ordered to repay more than $1.3 million that he received during the health care company's $2.7 billion accounting fraud.
Crumpler was convicted Nov. 18 of one count of conspiracy and one count of lying to auditors in the first successful trial for federal prosecutors in the case. Prosecutors had originally sought a forfeiture of $2.2 million. Crumpler, who served as chief financial officer of HealthSouth spin-off Source Medical Solutions Inc., faces a maximum sentence of 15 years in prison and nearly $1.3 million in fines.
The judge in the government's civil lawsuit over the huge earnings overstatement at HealthSouth Corp. threw out fraud claims against fired chief executive Richard Scrushy, who was previously acquitted on criminal charges in the scheme.
Separately, a federal judge dismissed two of the fraud counts filed against Scrushy, in a civil suit brought by the Securities and Exchange Commission. The judge said that the fraud counts weren't specific enough, and gave prosecutors another two weeks to re-file the charges.
The judge declined to dismiss another five claims against Scrushy, who is accused of aiding and abetting in false financial reporting, false record-keeping and failing to maintain proper internal controls at HealthSouth. Scrushy was acquitted in late June on all of the three dozen counts he faced in connection with a $2.7 billion accounting scandal that inflated earnings at the health care company. The civil suit seeks $786 million in penalties and restitution, and would not allow Scrushy to serve as an officer or director at any public company if found guilty.
Lawyers for Scrushy and the government have scheduled mediation talks to begin Jan. 18, which could lead to a settlement. HealthSouth previously settled its portion of the case for $100 million.
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