William T. Owens, who wore a wire to help the FBI uncover a $2.7 billion fraud at HealthSouth Corp., was sentenced to five years, the longest prison term given a defendant in the scandal, by a judge who called the acquittal of Owens’s boss, Richard Scrushy, “a travesty.”
“It disturbs me greatly to sentence you to prison knowing that in my opinion Richard Scrushy directed you and others to commit fraud,” U.S. District Judge Sharon Blackburn told Owens today in Birmingham, Alabama, before giving her decision. “And he will not spend a day in prison. In my opinion that is a travesty.”
Owens, 47, was one of 15 former HealthSouth executives, including five chief financial officers, to plead guilty and testify against Scrushy, who was acquitted in June. Former CFO Weston Smith received the second-most time behind bars, 27 months.
Owens helped manage the fraud closely for at least six years, according to his testimony at Scrushy’s trial. A former auditor with Ernst & Whinney, now Ernst & Young, Owens helped design the mechanics of the scheme to claim false assets and income to inflate the company’s reported profits. He hired other executives who became part of the fraud.
Prosecutors asked for leniency because Owens cooperated, instead of the maximum possible term of 30 years.