HealthSouth got involved in a corporate accounting scandal in which its founder, CEO, and chairman, Richard M. Scrushy was criminated of. Auditors have uncovered hundreds of millions of dollars in previously unreported accounting fraud at HealthSouth, the embattled chain of. Timeline of Accounting Scandal at HealthSouth. Compiled by washingtonpost. com staff. Thursday, September 30, ; PM. HealthSouth, the largest U.S.
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Scrushy had complete control over his company; even going as far as to have security cameras installed throughout headquarters to keep watch on his employees. When you get a bill or statement for a doctor visit, he noted, you see right away what was billed and what the insurance company is paying. September Learn how and when to remove this template message. How they were caught: The company also sold or closed many underperforming facilities, including its medical center division, in its effort to return to profitabiity.
The company currently operates one division: By the company had expanded to 50 facilities across the US.
The former outpatient division also operated an occupational medicine division untilwhen it was sold. The 13 story structure was meant as a replacement for its aging HealthSouth Medical Center in downtown Birmingham. The reverse stock split was approved by stock holders at a special meeting at the company’s corporate headquarters on October 18, There were as many asfraudulent journal entries in a single quarter.
It was also announced that the newly formed company was to remain in Birmingham.
What happened – HealthSouth Scandal
Although it is easy to get caught in the pressure of corporate fraud, one cannot let themselves blindly follow a CEO and be ethically deficient in their actions. It may be very easy scadal get caught in the pressure of corporate fraud but employees should not allow themselves to blindly follow a CEO who is ethically deficient and become ethically deficient in their actions as well.
But I did have one emotion that was stronger: In the summer ofHealthSouth badly missed its earnings target. However, Richard Scrushy still sold a large number of shares and announced that profits were accounging to fall. The false increases in earnings were matched by false increases in HealthSouth’s assets.
The transaction was completed on July 31, with Diagnostic Health Corporation being formed. However, it was an obvious deception and Richard Scrushy can not gain trust by investor. Wish I got out in time. In the company changed its name to HealthSouth Rehabilitation Corporation.
What did we do, though? Health south is not only involved in money fraud but also in false workers compensation case as well. The Commission’s complaintfiled in federal district court in Birmingham, Ala.
SEC Charges HealthSouth Corp. CEO Richard Scrushy With $1.4 Billion Accounting Fraud
By the end ofthe company had most of its finances reorganized and was able to avoid Chapter 11 bankruptcy. Then, the scandal at HealthSouth started to become evident in mid I can decide if I want to stay or go, but Chelsea will make the healthsojth decision – if they want to let me go. It ceased operations in What HealthSouth did was understate its accounts receivable reserves and overstate its revenues.
By bringing to bear the acclunting of both agencies, we achieve maximum deterrence and greater relief for investors. As soon scaandal he could, he sold some stock and paid cash for a Mercedes. For example, he told one of his CFOs: I will be happy to share to blow the whistle on Health south.
Retrieved Jul 26, They will stop at nothing!
You are commenting using your Facebook account. He signed the attestation letter.
HealthSouth, Inc.: A Case of Corporate Fraud
In the company changed its name to HealthSouth Corporation to better reflect its diversified interests in healthcare. Following the raid at the company’s corporate headquarters, the board of directors held an emergency meeting to discuss what actions needed to be taken.
The s saw investors and lenders who were less focused on profitability and more so on revenue. But later that year, he met with U.