Healthsouth Corp

The House Energy and Commerce Committee said its probe into the financial collapse of HealthSouth Corp. was expanding to include UBS Warburg investment banker Benjamin Lorello. UBS also received a subpoena from the Securities and Exchange Commission in December or January, relating to the bank's dealings with HealthSouth, according to a source familiar with the probe. A representative of UBS Warburg, a unit of UBS, declined to comment.

A prominent Los Angeles-area sports medicine clinic has agreed to pay $3 million to the federal government to settle allegations that it received illegal kickbacks for referring patients to another healthcare provider, authorities said Tuesday. The Kerlan-Jobe Orthopaedic Clinic allegedly received kickbacks from the HealthSouth Corp. in the form of stock-option grants, donations to the Kerlan-Jobe Foundation, loan forgiveness on an equipment lease and a high ownership interest in an ambulatory surgery center owned by the two healthcare firms, according to the U.S. attorney's office.

HealthSouth Corp., the largest U.S. operator of rehabilitation hospitals, named Robert P. May chairman as it sought to emerge from an alleged $2.7-billion accounting fraud. May, HealthSouth's interim chief executive until last month, replaces Joel Gordon, 75, who remains on the board, Birmingham, Ala.-based HealthSouth said. HealthSouth named Jay Grinney CEO in May.

Former Alabama Gov. Don Siegelman was sentenced to more than seven years in federal prison and former HealthSouth Chief Executive Richard Scrushy got nearly seven years Thursday in a bribery and corruption case that the judge said damaged public trust in state government. Siegelman was ordered to pay a fine of $50,000, plus $181,325 to a state agency where prosecutors said kickbacks were made.

HealthSouth Corp., the biggest U.S. operator of rehabilitation hospitals, had second-quarter earnings of $57.5 million as it treated more patients and boosted rates. Net income was 14 cents a share, compared with a loss of $19.9 million, or 5 cents, a year earlier, the company said. Revenue rose 5.9% to $1.16 billion. Shares of the Birmingham, Ala.-based company rose $1.11 to $11.16 on the NYSE.

A former HealthSouth Corp. vice president pleaded guilty to lying to the FBI about a bribery and kickback scheme involving the company's contracts to run a Saudi Arabian hospital, prosecutors said. Thomas Carman, 52, is the second former executive of the Birmingham, Ala.-based rehabilitation giant to plead guilty to charges involving the hospital. He faces up to five years in prison and a fine of up to $250,000 for one count of making a false statement to authorities.

HealthSouth Corp. must face investors' lawsuits claiming that executives used inside information to sell $106.7 million of the hospital company's shares, a judge ruled. Delaware Chancery Court Judge Leo Strine rejected the company's bid to put the suits on hold while a special committee investigates stock sales by Chief Executive Richard Scrushy and other board members.

A former HealthSouth Corp. executive awaiting sentencing for his role in a $2.7-billion accounting fraud testified that he and four subordinates stopped cooking the books after reading a new false-filings law in August 2002. Former Assistant Controller Emery Harris testified in federal court in Birmingham, Ala.

HealthSouth Corp. said it had finished a massive internal review that verified years of fraud worth $3.4 billion. But even as the report provided more evidence of the amount of fraud at the rehabilitation giant, a federal judge sentenced Kenneth Livesay, former assistant controller at HealthSouth, to six months of home confinement. U.S. District Judge U.W. Clemon in Birmingham, Ala.

A U.S. appeals court for the second time threw out a prison sentence for former HealthSouth Corp. finance chief Michael Martin, calling the penalty too lenient for his role in a $2.7-billion fraud at the Birmingham, Ala., rehabilitation hospital company. The U.S. 11th Circuit Court of Appeals in Atlanta reassigned Martin's case to a new judge. The three-judge panel criticized Chief U.S. District Judge U.W.

Fired HealthSouth Corp. Chief Executive Richard Scrushy agreed to pay $81 million to settle a Securities and Exchange Commission lawsuit blaming him for a $2.7-billion accounting fraud at the healthcare services firm. The settlement was approved by a federal judge Monday. Scrushy admitted no wrongdoing but agreed to give up $77.5 million the government said he gained from the scheme. He agreed to pay an additional $3.5 million in civil penalties.

HealthSouth Corp. said it would sell about 600 outpatient rehabilitation centers in 35 states to privately held Select Medical Corp. for about $245 million as it proceeded to focus solely on post-acute care while recovering from a $2.7-billion accounting scandal. HealthSouth is shedding a division that once formed the most visible part of its business and helped make it the nation's largest rehabilitation chain. Chief Executive Jay Grinney said Birmingham, Ala.

HealthSouth Corp. founder Richard Scrushy agreed to pay the company $31 million as part of a settlement of litigation over his bonuses and legal fees. Scrushy dropped a lawsuit in which he sought $21 million for legal fees after HealthSouth agreed to credit that amount against $52 million he owes for inflated bonuses, said Teresa Tomlinson, one of his lawyers. HealthSouth ousted Scrushy in 2003 after a $2.7-billion accounting fraud was uncovered at the Birmingham, Ala.

A final, $445-million settlement between HealthSouth Corp. and investors was announced Wednesday to end class-action lawsuits stemming from a huge fraud at the health services company. Under the agreement, which goes to a judge for approval, the Birmingham, Ala.-based company would pay $215 million in cash, stocks and warrants. Insurance companies would pay the remaining $230 million.

Fired HealthSouth Corp. Chief Executive Richard M. Scrushy must repay $47.8 million in bonuses that he wrongly received during a massive financial fraud at the rehabilitation and medical services chain, the Alabama Supreme Court ruled Friday. The court unanimously upheld a lower court order that sided with a shareholder who sued Scrushy claiming that the HealthSouth chief received the bonuses improperly as the scandal secretly engulfed the company for seven years beginning in 1996.

A U.S. appeals court for the second time threw out a prison sentence for former HealthSouth Corp. finance chief Michael Martin, calling the penalty too lenient for his role in a $2.7-billion fraud at the Birmingham, Ala., rehabilitation hospital company. The U.S. 11th Circuit Court of Appeals in Atlanta reassigned Martin's case to a new judge. The three-judge panel criticized Chief U.S. District Judge U.W.

The former lead attorney for HealthSouth Corp. testified that he often wrote statements attributed to Richard Scrushy in financial statements, which the since-fired chief executive sometimes signed without seeing. Bill Horton, who ran HealthSouth's legal department during the years of a massive earnings overstatement, was called as a defense witness in Scrushy's fraud trial in Birmingham, Ala., as Scrushy's lawyers tried to distance him from company reports that contained bogus numbers.

For the fourth time this week a judge declined to give jail time to a former HealthSouth Corp. executive, sentencing an ex-employee to two years' probation and a $5,000 fine for her role in an accounting scandal. Catherine Fowler, 37, a former HealthSouth vice president of treasury and cash manager, had pleaded guilty to conspiracy to deceive auditors and maintain false books and records at the Birmingham, Ala.-based company. Judge U.W.

The only HealthSouth Corp. executive convicted by jurors in a $2.7-billion fraud was sentenced to eight years in federal prison Thursday, the longest term imposed in the huge accounting scam at the rehabilitation chain. Hannibal "Sonny" Crumpler, a former vice president and division controller, was sentenced by U.S. District Judge Virginia Emerson Hopkins after the defense urged her to order probation or a combination of house arrest and parole.