Thursday, December 11, 2003

Former execs get reduced sentences

They had cooked HealthSouth books

By Jay Reeves
The Associated Press

BIRMINGHAM, Ala. - A tearful former HealthSouth executive was ordered to prison for five months Wednesday and four co-workers got probation in the first sentencings linked to the fraud that rocked the rehabilitation chain.

All five contended that they took part in the scheme to inflate earnings out of fear of losing their jobs, and all five got reduced sentences from U.S. District Judge Inge Johnson for their help in the investigation.

Former assistant controller Emery Harris, facing a maximum penalty of 15 years' imprisonment and $1.5 million in fines, was sentenced to five months in prison, another five months of home detention, ordered to forfeit $106,500 and fined $3,000.

Wiping away tears, Harris told Johnson he was relieved when an FBI agent and a prosecutor showed up in his driveway in March after a raid at the company's Birmingham headquarters.

"I knew I could finally get out of this mess," Harris, 32, said.

Johnson said she had a hard time coming up with the right sentence for Harris, who was ordered to report to prison Feb. 2. "You're just a kid. I have a son your age," she said.

Former corporate vice presidents Angela C. Ayers, Cathy C. Edwards and Rebecca Kay Morgan, and Virginia B. Valentine, a former assistant vice president, were sentenced to four years' probation, including six months of home detention, and fined $2,000. Morgan also was ordered to forfeit $235,000.

Each had faced maximum sentences of five years in prison and fines of $250,000. But Johnson ruled previously that the women were little more than data entry clerks altering accounts, despite their titles.

The government requested light sentences but objected to the judge's refusal to order restitution for victims of the scam. U.S. Attorney Alice Martin said the five weren't typical criminals.

"I do believe that regardless of their actions, they believed in HealthSouth, and they believed in management," Martin said. "Unfortunately, there were people in which they misplaced their trust."

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