Fired HealthSouth CEO sues the company


Richard Scrushy, former CEO of HealthSouth, is suing the company for $70 million related to his March 2003 firing. He was fired following the discovery of a $2.7 billion fraud at the company.

Scrushy claims that since he was acquitted on 36 criminal counts related to the fraud, he should still be an employee. His employment contract specifies a $1.2 million annual salary as chairman and director, a minimum of $1.2 million annual bonuses, and additional incentives such as stock options, employee benefits, fringe benefits, and severance pay.

The HealthSouth fraud began in mid-1996 and went on for over seven years. It added $2.7 billion to the company’s bottom line, when the true figure for that period was $1.7 billion (40% of what the company reported). Headquarters added revenue to the figures submitted by the clinics, hospitals, and other facilities owned by HealthSouth.

Scrushy was ultimately acquitted on all charges related to the fraud.

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