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HealthSouth CFO pleads guilty

BIRMINGHAM, Ala. — HealthSouth Corp.'s suspended chief financial officer has agreed to plead guilty to fraud and conspiracy charges, according to federal court documents made public Wednesday. The rehabilitation chain company has been accused of a massive accounting fraud.

William T. Owens, suspended March 20 along with the health care concern's chief executive, Richard Scrushy, was also charged with filing false certification of financial information with the Securities and Exchange Commission. He faces possible jail time and a substantial fine.

The criminal charges were filed in a sealed document late Tuesday that was made public Wednesday morning just before a scheduled court hearing.

Owens, 44, of Birmingham, made no comment before the hearing began. He wore a dark suit and discussed his golf game with attorneys.

Owens and Scrushy were suspended a day after the SEC accused Scrushy and HealthSouth in a civil suit of overstating profits by at least $1.4 billion since 1999.

The board elected director Joel C. Gordon to replace Scrushy as acting chairman and assigned another director, Robert P. May, as acting CEO. Directors have been looking for an interim CFO.

This is the second agreement reached in the HealthSouth investigation.

On March 19, the Justice Department announced that the company's former chief financial officer, Weston Smith, had agreed to plead guilty to securities fraud, conspiracy and wire fraud charges, as well as false certification of financial records.

Smith, 42, of Hoover, also agreed to cooperate with the federal government's investigation, the Justice Department's statement said.

HealthSouth is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitation services. It has about 50,000 employees and 1,700 facilities in all 50 states and abroad.