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Posted on May 7th, 2014, by

The case of Scrushy was one of the most important legal cases of the early 2000s, since the HealthSouth was one of the renowned companies and the scandal involving the company was similar to that of Enron and other cases. Ironically, the HealthSouth was the company that operated in the field of health care, where moral values and ethical responsibility are extremely important and comprise an integral part of the work of health care professionals. In such environment, unethical behavior and crimes are absolutely unacceptable. However, it is exactly in such organization Scrushy conducted his fraudulent manipulations and operations which brought him considerable profits but, on the other hand, put under a threat the further existence of the company (Markham, 2008). In fact, when investigation was complete, Scrushy was charged of accounting frauds, including altering financial returns and many other crimes committed by him, when he was the chairman of the board of the HealthSouth. In such a way, accounting frauds was the core of allegations against Scrushy.

At the same time, accounting frauds and altering financial returns were not the only crimes committed by Scrushy. In fact, he committed a lot of other crimes, among which it is possible to single out crimes related to the corruption. For instance, Scrushy paid $500,000 to former Alabama Governor Don Siegelman in exchange for a seat on a state regulatory body in 2006 (Curran, 2009). In such a way, bribery and corruption were essential elements of the business developed by Scrushy.

Corruption charges for money laundering, obstruction, racketeering, and bribery were the natural result of his criminal accomplishments and his “cooperation”¯ with Alabama Governor and other politicians. His actions were illegal and absolutely unethical, although all his actions were always profit driven. This means that he was always looking for ways to maximize his profits and to take all advantage of his position as the top executive of the HealthSouth. In addition, he had good relations with many famous people and leading politicians that facilitated his corruption activities, while he probably believed that he will never be punished.

Therefore, shareholders were deceived and the company founded by Scrushy was ruined that affected not only shareholders but also employees of the company. At this point, it is important to dwell upon key stakeholders of Scrushy actions and policies conducted by him as the chairman of the board of the HealthSouth. In such a way, Scrushy violated legal norms but, more important, his actions violated fundamental principles of business ethics for he neglected interests of the company he headed and its shareholders. At this point, it is worth mentioning the fact that many shareholders invested substantial funds in the HealthSouth because they trusted the company. In fact, HealthSouth was a renowned brand in the early 2000s and investors were absolutely confident in the reliability of the company. In such a situation, they could hardly doubt that the company was growing as accounting repots and audits of the company showed. However, the positive marketing performance and stable financial position of the HealthSouth was not absolutely true beacsue Scrushy used accounting frauds to deceive investors and shareholders. In such a way, Scrushy had managed to raise substantial funds for his company and attract new investors over and over again.

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