HealthSouth Ex-CFO Gets 3-Month Sentence

A judge Thursday sentenced HealthSouth Corp.’s first chief financial officer to three months in prison for his role in a $2.7-billion earnings overstatement at the rehabilitation and medical services chain.

Aaron Beam, who helped Richard Scrushy found the company in a one-room office in 1984 and testified against the ousted chief executive this year in his fraud trial, also will forfeit $275,000 under a deal worked out with prosecutors. The judge added a $10,000 fine, plus one year of probation.

Sobbing as he stood before the judge in a Birmingham courtroom, Beam apologized and said he went along with the fraud out of fear of Scrushy.

“I should have stood up to Richard Scrushy and said ‘no,’ but I didn’t,” he said.

A jury found Scrushy not guilty of criminal charges this year. But during Thursday’s sentencing, U.S. District Judge Robert Propst said he had no reason to doubt the trial testimony of Beam, who said Scrushy ordered the fraud by telling him to “fix the numbers.”

Later, after two Beam friends pleaded for leniency, Propst praised Beam for acknowledging his role in the crime.

“You’re certainly not the worst fish in the sea in this deal,” the judge said. Probation wasn’t an option under the law because of the seriousness of the charge, Propst said.

An attorney for Scrushy said, “No one made Aaron Beam break the law.”

“I think it’s very unfortunate that [he] is trying to shift some blame for his own criminal conduct,” Scrushy lawyer Donald Watkins said.

Although 15 former HealthSouth executives pleaded guilty in the fraud, Beam was only the second one sentenced to prison.

Beam pleaded guilty in 2003 to bank fraud, but prosecutors asked Propst for leniency.