Health South
Introduction Scandal erupted at HealthSouth in 2003 when Richard M. Scrushy was accused by the Securities Exchange Commission (SEC) of falsely inflating HealthSouth earnings. Mr. Scrushy’s story began in Selma, Alabama, the middle child of a modest family. He was a high school dropout at the age of seventeen and was married to his first wife with whom he had two children. Richard Scrushy worked diligently to provide for his family. Residing in a trailer park, Mr. Scrushy became dissatisfied by the mundane role of pumping gas and bricklaying. This frustration preceded Scrushy to pursue a college degree as a respiratory technician. Following his clinical training, Scrushy flourished as an instructor of respiratory therapy at the University of Birmingham. Richard Scrushy eventually became the director of the respiratory unit at a Birmingham hospital and in 1979; he started working for Life-mark Corporation, a proprietor who managed hospitals. Mr. Scrushy held various positions including vice president of a corporate development and vice president of Lifemark Shared Services. At the age of twenty-eight, Mr. Scrushy transformed from a blue collar worker to a corporate director (Kellion, 2007). Lifemark was acquired in 1983 and Mr. Scrushy framed an idea for a company that offered outpatient rehabilitation services for less expense and a quicker recovery time for patients. This conception became an actuality and Scrushy formed HealthSouth (Kellion, 2007). Employees often described Mr. Scrushy as a tyrant. He was described as someone who sought to maintain tight control over aspect of the business. Jennings (2012) indicated employees used fictitious names as they posted information on Yahoo describing Mr. Scrushy’s management approach. Mr. Scrushy’s Monday morning meetings frequently resulted in tirades about employees not meeting budgets, even to the dollar. Jennings (2012) implied one officer described the corporation as fraudulent in which
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