The former HealthSouth Corp. executive on Tuesday was sentenced to five years probation for his part in the multibillion-dollar accounting scandal that rocked the Birmingham-based health-care company.
Judge U.W. Clemon handed down the light sentence to Kenneth Livesay, who had been an assistant controller and chief information officer at HealthSouth, as a reward for Livesay’s cooperation with law enforcement officials investigating the scandal.
“He has come forward with invaluable information. He has saved the government a lot of time,” Clemon said in handing down what amounted to a slap on the wrist — compared with the five years in prison prosecutors had been seeking for Livesay.
“I always sentence on the low end of the guidelines when someone has cooperated,” Clemon added.
In addition to probation, Livesay will have to spend six months under electronic monitoring and pay a $10,000 fine and forfeit $750,000 in ill-gotten gains for his part in overstating HealthSouth earnings and assets.
Livesay had pleaded guilty to criminal fraud and wire fraud.
“He is one of the individuals who completely, honestly and truthfully laid out all he knew,” Richard Wiedis, a trial attorney for the U.S. Justice Department, told the judge.
So far, only one person has received prison time from the scandal, which left HealthSouth’s stock trading for pennies and the company in default on its loans.
In December, former Assistant Controller Emery Harris was sentenced to five months in prison by Judge Inge Johnson.
On the same day, four other former HealthSouth executives, all women who had pleaded guilty, were spared jail time, receiving four years probation and six months of home detention.
Former Chief Financial Officer Malcolm McVay is scheduled to be sentenced on Wednesday. The highest ranking HealthSouth official to come up for sentencing, McVay is one of five former CFOs who pleaded guilty in the scandal