According to the opinion, Mr. Livesay and members of HealthSouth’s accounting staff would meet to determine ways to inflate the company’s earnings, and once the plan was decided, Mr. Livesay instructed the company’s accounting staff to manipulate accounts to accomplish the task, including making false entries in such areas as the property plant and equipment account, the cash account, the inventory account and the intangible asset (goodwill) accounts.
Mr. Livesay also participated in the preparation of HealthSouth’s 1998 quarterly and annual reports filed with the Securities and Exchange Commission, including HealthSouth’s 10-Ks, knowing that the report materially misstated the companies net income, revenue, earnings per share, assets and liabilities, among others, according to the opinion.
Mr. Livesay was charged with conspiracy to commit wire fraud, securities fraud and falsifying books and records; falsely certifying financial information filed with the SEC; and a forfeiture count related to count one in April 2003, according to the opinion. He filed a plea agreement with the government in 2004.
The opinion ruled that probation was not a suitable sentence for Mr. Livesay’s role in the accounting fraud, saying, “it is difficult to imagine a would-be white-collar criminal being deterred from stealing millions of dollars from his company by the threat of a purely probationary sentence, regardless of how much probation that person received.” The court also stated that only the threat of detention in a federal prison for “a meaningful time” would be an appropriate deterrent for this type of white collar crime.
Read the 11th U.S. Circuit Court of Appeals opinion on the probation of Kenneth Livesay (pdf).
Becker’s 3rd Annual Fall Chief Pharmacy Officer Summit is the top tier event that the people leading the future of pharmacy convene. This 3-day event is built specifically for Chief Pharmacy Officers and senior pharmacy leaders. The sessions examine the workforce, financial and clinical priorities shaping pharmacy today. Becker’s is where candid discussions flourish and new ideas thrive. Becker's 3rd Annual Fall Chief Pharmacy Officer Summit
