Ex-HealthSouth official is under house arrest

BIRMINGHAM, Ala. — A former HealthSouth Corp. chief financial officer was sentenced Wednesday to six months of house arrest for his part in a multibillion-dollar accounting scandal at the chain of clinics.

Malcolm "Tadd" McVay was also given five years on probation, fined $10,000 and ordered to forfeit $50,000 in ill-gotten gains.

McVay said he was "profoundly sorry" and "totally embarrassed" as he begged for leniency.

"I'll bear the scarlet letter. It won't be an 'A,' it will be an 'F,' for fraud," he told U.S. District Judge U.W. Clemon.

McVay pleaded guilty to charges that included conspiracy to commit fraud at Birmingham-based HealthSouth, the nation's biggest chain of outpatient surgery, diagnostic imaging and rehabilitation centers.

Prosecutor Richard Wiedis had urged the judge to send McVay to prison for more than five years.

After McVay's hearing, Clemon imposed similar punishment on Richard Botts, a former senior vice president for taxes at HealthSouth. Prosecutors had sought a prison term of more than three years.

Botts, 45, admitted filing false tax forms to hide the fraud. While he received the same house arrest, probation and fine as McVay, he was ordered to forfeit more money — $265,000.

Wiedis objected to both men's sentences, saying Clemon was disregarding rules that a sentence should reflect the seriousness of the crime.

Richard Scrushy, HealthSouth's founder and fired chief executive, is awaiting trial on charges he made millions off a complex scheme to inflate HealthSouth earnings for years. The company has said profits were overstated by as much as $4.6 billion.

Seventeen former HealthSouth executives have reached plea bargains and are cooperating with investigators. Of eight sentenced so far, seven have received probation and one was sentenced to five months in prison.