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Ex-HealthSouth CFO gets 5 years in jail
William Owens, prosecution witness in Scrushy case, get stiffest penalty out of whistle blowers.
December 9, 2005: 4:39 PM EST

BIRMINGHAM, Ala. (Reuters) - The main witness in the fraud case against the founder and former chief executive of HealthSouth Corp., was sentenced to five years in prison for his part in the $2.7 billion scheme Friday.

One-time chief financial officer of the rehabilitation and health services chain, William Owens, secretly recorded conversations for the FBI and testified for 11 days against his former boss Richard Scrushy. A federal jury acquitted Scrushy of all charges in June.

The Justice Department recommended that Owens, who is the last of the five former HealthSouth chief financial officers to be sentenced after pleading guilty to fraud, receive an 8-year sentence, according to the Wall Street Journal.

Scrushy's lawyers painted Owens as the mastermind of the conspiracy in the lengthy trial earlier this year.

But U.S. District Judge Sharon Blackburn, in her comments before the sentencing, said she did not believe Owens was the architect of the fraud after reviewing the evidence and testimony.

"That person in my view escaped justice," Blackburn said. "I personally believe you told the truth in Mr. Scrushy's trial."

The judge added that a lengthy sentence is not necessary to deter Owens from committing another crime.

"The sentence I impose is to deter others. Corporate offenders are nothing more than common thieves wearing suits and wielding pens," she said.

She then sentenced Owens to five years in prison and two years of probation. It was the harshest sentence meted out so far to any of the 15 executives charged in the case.

Mr. Owens's lawyer said in a court filing that potential sentence -- more than three times as long as that of anyone else involved in the fraud cases -- would deter potential whistle blowers from cooperating with law enforcement officials, according to the Journal.

Another former finance chief and whistle blower, Weston Smith, was recently given 27 months in prison by a different judge, and former assistant controller Emery Harris spent five months in jail for their involvement in the multibillion-dollar accounting scandal.

Federal attorney Alice Martin said that Mr. Owens was not a whistle blower because he only began cooperating with the investigation after being served with a subpoena in a separate insider-trading investigation, said the report.

Three other ex-CFOs, sentenced by other federal judges, received little or no jail time for their parts in the conspiracy.

Owens is due to report to prison April 3.

Jason Brown, former vice president of finance, will be sentenced on Dec. 21, becoming the last of the 15 executives who pleaded guilty to fraud in the accounting scandal.


Scrushy announces his resignation from board of HealthSouth -- Click here.

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