Alabama health care company's financial officer charged in fraud case

Wednesday, March 26th 2003, 12:00 am

By: News On 6

BIRMINGHAM, Ala. (AP) _ The suspended chief financial officer of health care giant HealthSouth Corp. has agreed to plead guilty to fraud and conspiracy, according to federal court documents released Wednesday.

William T. Owens, suspended Thursday along with chief executive Richard Scrushy, faces a maximum of 30 years in prison and up to $5.5 million in fines. A sentencing date was to be set later.

The charges, including fraud, conspiracy and filing false certification of financial information with the Securities and Exchange Commission, were filed in a sealed document late Tuesday.

Owens was expected to enter his plea at a hearing Wednesday.

A phone call to Frederick G. Helmsing, an attorney for Owens, was not immediately returned.

The move to place Owens and Scrushy on leave came a day after the government accused Scrushy and the health care giant of overstating profits by at least $1.4 billion.

The board elected director Joel C. Gordon to replace Scrushy as acting chairman and assigned another director, Robert P. May, as acting CEO. Directors have been looking for an interim CFO.

The Securities and Exchange Commission accused Scrushy and HealthSouth of massive accounting fraud in a civil suit filed in Birmingham, where the company is based.

This is the second agreement reached in the HealthSouth investigation.

On March 19, the Justice Department announced the company's former chief financial officer, Weston Smith, had agreed to plead guilty to securities fraud, conspiracy and wire fraud charges, as well as false certification of financial records.

Smith, 42, also agreed to cooperate with the federal government's investigation, the Justice Department's statement said.

HealthSouth is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitation services. It has about 50,000 employees and 1,700 facilities in all 50 states and abroad.