, based in
Birmingham, Alabama , is the US's largest healthcare services provider. Best known for its rehabilitation services, HealthSouth has more than 1,900 facilities in fifty states, Canada, Australia, and Puerto Rico. It has both inpatient and outpatient rehabilitation facilities and outpatient surgery centers, including more than 330 hospitals. HealthSouth was involved in a corporate
Accounting Scandal in which its CEO
Richard M. Scrushy was accused of directing company employees to falsely report grossly exaggerated company earnings in order to meet stockholder expectations.
HealthSouth was incorporated in
Delaware in
1984 by its founder
Richard M. Scrushy . The company went
Public with its
IPO in 1986. Scrushy became chairman and chief executive officer in
1994 .
On
March 20 2003 HealthSouth and its founder/CEO
Richard M. Scrushy were accused by the
U.S. Securities And Exchange Commission (SEC) of an
Accounting Scandal where the company's earnings were falsely inflated by $1.4 billion. In 1996, Scrushy allegedly instructed the company's senior officers and accountants to falsify company earnings reports in order to meet investor expectations and control the price of the company's stock. In certain fiscal years, the company's income was overstated by as much as 4700 percent. The $1.4 billion represents more than 10 percent of the company's total assets.
In June of 2005, Scrushy was acquitted of all 36 of the accounting fraud counts against him, most notably one count in violation of the
Sarbanes-Oxley Act , which casts doubt on the enforceability of the law. He still faces federal charges of bribery and mail fraud.
- MedPartners Inc. — a physician practice management company founded by Scrushy, today the company is known as Caremark Rx
- Capstone Capital Corp. — a real estate investment trust founded by Scrushy
- Source Medical Solutions — healthcare technology systems
- GG Enterprises ( Hoover, Alabama ) — founded by Scrushy's mother and brother
- 21st Century Health Ventures (Birmingham) — founded by Scrushy and former HealthSouth CEO Michael Martin
- MedCenterDirect.com ( Atlanta ) — HealthSouth bought 6.4 million shares of this hospital supplies company
- Integrated Health Services Inc. ( Sparks, Maryland ) — a nursing homes and rehabilitation center company that Scrushy was a director of in the 1990s
- HealthTronics Surgical Services Inc. ( Marietta, Georgia ) — Michael Martin was director while CFO at HealthSouth
