The Healthsouth Scandal : Richard Scrushy

3148 Words Oct 23rd, 2014 13 Pages
To help understand what happened in the HealthSouth Scandal we’ll need to understand a few things. First we need to know some of the key people involved. The person who allegedly spearheaded the scandal was Richard Scrushy. Scrushy was the CEO of the company starting in 1994 until he was removed from office in 2003, and was also one of the cofounders of HealthSouth. He is thought to have been the one to convince the rest involved to commit the fraud.
Next we’ll need to know is who the “Big 5” were. (Stuart) The “Big 5” were the five CFO’s involved in the scandal. (Stuart) Starting in chronological order of time in which they held the CFO position we’ll start with Aaron Beam Jr. Aaron served in the company for almost 13 years and was also one of the cofounders with Scrushy. Next we have Michael D. Martin, followed by William T. Owens, Weston Smith, and finally Malcolm “Tadd” McVay. All the CFOs had a hand in the HealthSouth fraud which misled investors by overinflating the stock price of HealthSouth stock making it appear more profitable than it actually was.
Next we need to include the five CFO’s direct staff. We’ll start with Richard Botts who was the Vice President for Taxes within HealthSouth between 1998 and 2003 (Stuart). He was responsible for filing falsified document to tax officials. Jason Brown, HealthSouth’s Vice President of Finance between 2000 and 2003, falsified documents to help fix HealthSouth’s books and make the company look more profitable than it…
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