Criminal Injustice

21 June 2004



HealthSouth Sentencing Undermines Law

Michael Martin was CFO of HealthSouth when the fraudulent actions occurred that destroyed the company and the lives of so many involved with it. Forensic accountants believe the total damage could amount to $4 billion. In a gross miscarriage of justice, Mr. Martin will do not a single day in jail.

Nine people have pled guilty to charges that all relate to fraud in the HealthSouth case. Only one, Emery Harris, is going to the slammer, and he's doing five months. Mr. Martin will have to do 5 years' probation, pay a $50,000 fine, and give back gains of $2,375,000.

The judge decided to go easy on Mr. Martin because of the help he had provided after his arrest to the authorities. However, no matter what assistance he has rendered, his position as CFO made him the indispensable man in this case. Without his acquiescence, nothing could have happened.

The precedent is most unfortunate. White collar criminals aren't very happy about giving back money, paying fines or dealing with probation. However, the real deterrent in this situation is prison. And while it is usually acceptable to reward defendants to cooperate with lighter sentences, the CFO of a company engaged in cooking the books ought to be the target of the case. The government was asking for five years jail time, and it got nothing.

Mr. Martin's cooperation may help the government in its case against former CEO Richard Scrushy, who pleaded "not guilty" to 85 criminal counts. And if he walks or gets no jail time, precisely what is left of justice on Wall Street?


© Copyright 2004 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.


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