A Medical Device Daily
Jury deliberations in the corporate fraud trial of Richard Scrushy, founder and former CEO of HealthSouth (Birmingham, Alabama), were slated to begin today, following the presentation of closing arguments yesterday.
Scrushy is accused of masterminding the company’s fraudulent accounting over several years, with the trial being seen as a test of recent Sarbanes-Oxley legislation which holds top-level executives responsible for a company’s financial reporting.
An interesting development in the case came with the recent unsealing of transcripts for a hearing that the judge in the case, Karon Bowdre, held with prosecutors and defense lawyers in late 2003.
That transcript indicates that Bowdre was uncomfortable with presiding over the trial, because she was what she herself termed a “neophyte” in criminal law and also that she knew a daughter and ex-wife of Scrushy.
These were apparently not significant issues for either the prosecution or defense, however, since neither side has asked her to step down.
In other legalities, a physician working in the Cambridge, Massachusetts, area has pleaded guilty to federal charges that he submitted false billing claims to the Medicare program.
U.S. Attorney Michael Sullivan and Kenneth Kaiser, special agent in charge of the Federal Bureau of Investigation in New England, said that Vladimir Shurlan, of Cambridge, made the guilty plea before a U.S. District Court judge, admitting that he submitted billings to the Medicare program and to various private insurance companies that misrepresented the medical services that he was actually providing.
Additionally, he acknowledged that he continued to bill in this manner even after receiving a letter from a private insurance company advising him that his billing practices represented a “gross misrepresentation of the services performed.”
Between Aug. 10, 2000, and Jan. 23, 2003, Shurlan received Medicare reimbursements totaling about $46,540, or nearly double what he would have received had he accurately described the treatments provided, federal officials said.
Shurlan’s sentencing is slated for early August, with a plea agreement setting a sentencing range of six to 12 months in prison or home detention, followed by three years of supervised release. Shurlan also agreed to pay $56,425 to various private insurance companies that were defrauded by his conduct.
In a separate civil settlement, Shurlan also agreed to pay somewhat more than $89,000 to resolve liability under the False Claims Act, the government said.