Exec Tells of Odd Profit Data at HealthSouth

A HealthSouth Corp. executive suspected financial wrongdoing as early as 1998, but her superiors dismissed her concerns, according to testimony Tuesday in the fraud trial of fired Chief Executive Richard Scrushy.

Scrushy, who is being tried in federal court in Birmingham, Ala., is accused of conspiracy to overstate earnings by about $2.7 billion.

Just back from maternity leave in spring 1999, Diana Henze said, she noticed a $60-million jump in net income and a boost of 14 cents in earnings per share as quarterly reports were being put in final form. She said she had noticed odd numbers in 1998 too.

Henze, an assistant vice president of finance at the time, said she told her superiors the data looked suspicious.