Corporate Compliance

Cross examination takes former HealthSouth CFO to task over light sentencing

Compliance Monitor, March 9, 2005

After four days on the witness stand detailing former CEO Richard Scrushy's alleged participation in widespread corporate fraud at Birmingham, AL-based HealthSouth Corp., former company CFO Mike Martin faced a heated cross examination from Scrushy attorney Jim Parkman, the Associated Press (AP) reported March 5.

In addition to trying to establish inconsistencies in Martin's testimony, Parkman also took the former CFO to task about the terms of his punishment for pleading guilty as part of the fraud scheme, according to AP accounts of the trial. Parkman alleged that Martin's sentence included only six months of home confinement, which allowed him to see his wife and children; watch a big-screen TV; and play golf at a high-priced country club.

In spite of Parkman's efforts to rattle Martin, the AP reported that Martin "stayed cool rather than cracking." Martin stayed consistent with his earlier testimony that there are no documents linking Scrushy directly to the fraud, but that Scrushy knew about the scheme all along.

Parkman's efforts, according to the AP, were an attempt to discredit Martin and show the discrepancies between punishment for the executives who earlier pleaded guilty to fraud charges and the maximum penalties Scrushy faces--life in prison and forfeiture of $278 million in assets.

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