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Liberty and Justice For ALL?
Do you think you would get a similar ruling if you were the defendant in this case?
Do you smell any possible impropriety in this case?
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Ex-HealthSouth CFO Gets 5 Years Probation
By Verna Gates
HUNTSVILLE, Ala. (Reuters) - A federal judge on Saturday sentenced former HealthSouth Corp. Chief Financial Officer Michael Martin to five years probation for his role in the company's massive accounting scandal, again ignoring the government's recommendations for jail time.
Judge U.W. Clemon also fined Martin $50,000 and ordered him to forfeit gains of $2,375,000. The prosecution had asked for five years in prison, protesting what it considered extreme leniency in sentencing.
Nine other HealthSouth executives who pleaded guilty in the fraud have been sentenced. Only one - Emery Harris - has received jail time, for five months.
Martin had pleaded guilty in May to conspiracy to commit wire and securities fraud and to filing false books and records in what the government called a scheme by a group of HealthSouth officers to deliberately overstate earnings by $2.7 billion over several years.
"He was the most culpable of those sentenced to date. He had the most seniority, the most authority and the longest time. He also obtained substantial income," said Michael Rasmussen, assistant U.S. attorney for the northern district of Alabama.
"There were $400 million in losses and thousands of victims," Rasmussen said. "Ordinarily that would be grounds for upward departure," or more time in jail.
Forensic accountants working for the rehabilitation hospital operator's new management team have said the fraud could be in excess of $4 billion.
Defense attorney Mark Hulkower said Martin tried in 1999 to convince then-CEO Richard Scrushy to reduce Wall Street's expectations for the company and resigned in 2000 when Scrushy pumped up the numbers.
Scrushy has pleaded not guilty to 85 criminal counts and is awaiting trial.
Hulkower, who is from the Washington law firm Steptoe and John, also noted Martin's cooperation in the ongoing investigation.
"His assistance in the quality and quantity of information is greater than any other," Hulkower said.
The defense lawyer also pointed out Martin's early responsibilities after his father died young in an accident.
"It is a small world. My father worked in the stockyard, and I am familiar with the accident," said Clemon, who was the first African-American judicial appointee in Alabama, under President Carter.
Even attorney Doug Jones, who is suing on behalf of stockholder victims, testified on Martin's behalf. "In this case, the breadth of the fraud is overshadowed by Mr. Martin's cooperation to help non-HealthSouth defendants," Jones said.
About 40 of Martin's relatives and fellow church members were in attendance, driving the 100 miles from Birmingham, where the court proceedings are generally held.
"I want to apologize to apologize to the employees and stockholders of HealthSouth and their families," Martin said, with his head bowed. "I betrayed their trust."
Court was held in Huntsville on Saturday because of defense attorneys' scheduling conflicts and a large music festival in downtown Birmingham.
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