A Diagnostics & Imaging Week

Former HealthSouth (Birmingham, Alabama) executive Jason Brown was sentenced last week to jail for his role in the accounting fraud at the rehabilitation and medical services chain. His jail time was put at one year and a day, and he also will serve two years of probation for his part in the $2.6 billion inflation of HealthSouth accounts.

Brown pleaded guilty in December 2003 to falsifying the company’s financial records, allowing HealthSouth to show that a $27 million stock sale was done in 2002 when it was actually done in 2001.

Brown is the last of 15 HealthSouth executives who entered guilty pleas to be sentenced for participating in the accounting scandal. Hannibal Crumpler, a former controller of the company’s outpatient division who was convicted at trial, is scheduled to be sentenced in May.

U.S. District Judge Sharon Lovelace Blackburn told Brown she realized his sentence was harsher than those given to some of the higher-ranking HealthSouth executives who pleaded guilty. Former CFOs Tadd McVay, Mike Martin and Aaron Beam were sentenced to probation, one week and three months, respectively. Blackburn did not sentence any of those executives.

Richard Scrushy, founder and former CEO of the company was found not guilty of masterminding the accounting fraud by a Birmingham jury, but still faces charges filed by the Securities and Exchange Commission.

In other legalities, a class-action lawsuit has been filed in the U.S. District Court for the Southern District of California against SeraCare Life Sciences (Oceanside, California) alleging material misrepresentations to the market so as to inflate its share price.

The class period is from May 3-Dec. 19, 2005. The suit was filed by the law firm of Federman & Sherwood. Other law firms, including Schiffrin & Barroway and Lerach Coughlin Stoia Geller Rudman & Robbins, also filed class actions against the company over the past week.

SeraCare is a provider of biological products and services for diagnostic, therapeutic, drug discovery and research purposes.