A Medical Device Daily

HealthSouth's (Birmingham, Alabama) former president and chief operating officer, James Bennett, last week became the latest officer from the company to be indicted for his role in a $2.7 billion accounting fraud that prosecutors allege was directed by company founder Richard Scrushy.

Bennett was charged on the eighth day of Scrushy's fraud trial in Birmingham. Bennett is the 18th executive charged in a case in which 15 executives have pleaded guilty. A 39-count indictment accused him of conspiracy, securities fraud and insider trading in the sale of $17.39 million of company stock.

“Bennett and other co-conspirators would and did discuss HealthSouth's actual results of operations and financial performance and the need to falsify those before they were publicly reported,“ the indictment alleges.

The latest indictment complicates the legal strategy for Scrushy, who reportedly had intended to call Bennett as a defense witness.

Bennett was one of the highest-ranking executives not charged prior to last Thursday. He worked at HealthSouth from 1991 to 2000 and was mentioned several times in testimony in Scrushy's ongoing U.S. District Court trial.

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