I was a HealthSouth inpatient hospital CEO, started working there in 1996. Two weeks after I started that job, the hospital CFO left. He said to me, “I can’t do this anymore. They’re telling me to do things that aren’t appropriate.” I left a year later.
I worked for Healthsouth back in the early 2000s and it was the corporate greed of Scrushy that did in the company. Him and his wife had an extravagant lifestyle to include that he wanted to be in a band so he purchased the band Dallas County Line just so he could be their frontman and let's not even get started on his wife's $15,000 per month expenses on beauty. The thing I remember most was him inviting a large group to a lunch at the main headquarters. He got up to speak and announced that everyone in attendance were being laid off and if they needed to blame someone, blame their managers. He even had those managers line up at the exit to give the ex-employees handshakes on their way out. Talk about a trash move...
Thanks for the context. I recall the Grandview hospital being left incomplete because of the Scrushy related greed. Also all the stores that came out about him and his wife after the fact. There were truly greedy dillholes that ruined a lot of lives. Glad you made it out.
@@taylorb1356 Appreciate it...Luckily for me I came in briefly after all the drama happened and worked a year long project for Healthsouth getting their imaging clinics software updated so they could be sold. Because of Scrushy they ended up having to divest a lot of their business lines to pay back the debt.
I worked as a physical therapy tech for years at a HealthSouth rehab hospital in the mid 2000's. The fraud was rampant even on the facility level. On Saturdays, they would assign me patients to see. I would do chart review, exercise them, and walk them. Then the physical therapist would do the note as if they did the session and bill the insurance for skilled care. I thought this was normal practice until I got into PT school and found out that this was illegal. I was treating patients without the proper education or license. It is a true miracle I didn't hurt anyone.
I am also a PT. It is crazy to hear about stuff like this especially since they were such a big employer at the time. I was a tech as well before PT school and there is just so much that you need to know to look out for it is a miracle that no one got hurt. I don't know about what you have heard but it seems like at least in my region Encompass has made some improvements from where they were with regards to fraud and quality of care on top of their rebrand.
@@willgresham680 : The HealthSouth facility I worked at was bought out by a local doctor group and totally overhauled. I did some PRN work there everything is above board now. There are only two Encompass locations in Louisiana as I don't live near either I cannot speak to their quality of care
A family member of mine used to be the president of a hospital in Birmingham. He once said that HealthSouth was the only people he ever had to basically kick out of the hospital, because their pitch for a merger was so strange and stupid. I still remember being a kid and hearing friends of my parents who were involved in the healthcare and law fields saying that there was definitely something very weird going on at HealthSouth. (This was before the scandal became public. It was just obvious that something wasn't right about the business.) As a resident of Birmingham, Alabama (where HealthSouth was), I can tell you that Richard Scrushy was never liked or respected by many people. He was the "if you don't give me what I want then I wont donate to your charity" type of person. A little brat. I know of at least one country club that refused to accept him for membership because he was such an ass.
It's just inconceivable to me that the Ernst & Young auditors allowed this to happen. I cannot believe it was mere negligence. This wasn't a really sophisticated fraud. It was the kind of stuff we learned about early in our college auditing courses.
@@Grauenwolf I guess that's a good point. I got my undergraduate degree in Accounting, and I do understand that an audit isn't a guarantee. Two of my brothers are CPA's, now retired, and I do remember what the workload is like.
The key thing I’ve learned from all the stories of accounting frauds is that if I want to commit fraud, hire Earnst & Young as my partner. They’ve got my back.
@@Grauenwolf also with the fact a company could basically bribe the auditor staff members by hiring them into the company with better pay and less hours.
@@Grauenwolf I've never understood why the Big Three firms are held in high regard. They're just filled with kids right out of college. Because kids are willing to work long hours for low wages to "get ahead." I speak from personal experience, it takes many years to become a good auditor. I wouldn't trust financial statements audited by a bunch of new graduates who spent the past four or five years drinking and partying.
Almost every corporate fraud has EY as auditors. They give the same sorry excuses over and over again. Last scandal was Wirecard. Guess who audited them for years?
I vaguely remember seeing these everywhere around town. If I'm not mistaken, I think my mom or aunt went there after they were in a car accident. I remember how "big" this company was and it had rave reviews and was all the trend. They rapidly declined and within less than year, they were nonexistent. Had no clue what had to happen to them until now!
There is a documentary on Netflix called Trial by Media and it shows how he became friendly with impoverished churches in the community after he was charged.
Louis Rossman said in a recent video that Rich People would never try to cheat, because it's too much risk and they can afford accountants and lawyers to always keep things above board (a rich person told him this). Yet there are examples like this company man video all the time. I like Rossman's ideas about Right to Repair, but his views on the rich are just naive.
Exactly. I think the problem with his position is that it assumes that rich people are satisfied with the amount of wealth that they already have, and as such have no incentive to try and extract more value, which is simply not the case. It's also because companies are accountable to more than just individual rich people, but normally collectives of rich people in the form of shareholders, board members, etc. This means that wealth is split amongst these high-ranking individuals, so they proportionately get last, so they always have the individual incentive to extract more welcome the company. Honestly, it kind of borders on a tragedy of the commons sort of scenario where all the people at the top or acting in their own self-interest without anybody actually focusing on the sustainability of the company, and this in turn eventually kills the profitability for everyone.
The problem with that theory is that he assumes that cheating is always riskier then not cheating...AND he assumes that the accounts and lawyers would keep things above board. At the same time, having accountants and lawyers also makes it easier to cheat WELL. Furthermore, this case of cheating can be explained rationally. 1. Rational people think short term over long term. 2. IF he doesn't cheat, he loses the company, and risks bankruptcy. If he DOES cheat and doesn't get caught, then the company can survive one more day. If he cheats and gets caught...he loses the company and risks bankruptcy. But, there's a chance his lawyers can get him off... 3. In theory, once the company is back in the black, he can move back to honest accounting. (This theory is flawed) 4. If he cheats, he can afford MORE lawyers and accountants to protect him.
One of my ultra rich clients has internal accountants and an outside accounting firm that work without any interaction for checks and balances. He said that their numbers are frequently far enough off that he'll employ a third firm to go over their numbers. All so he can never be accused of cheating or theft.
In general, Rossman is right. If you want your enterprise to last and your wealth to grow you dont have to cheat if you can work through the rules in a way that favors you. But some people just straight up cheat and get caught eventually so the consequences from those poor choices are inherent. If you actually want to be wealthy and stay wealthy and youre not in the mob you have to obey the rules, if not in the way intended then at least in a way that complies on a purely technical level. That's what lawyers and accountants are for. Cheating is very, very risky and succumbing to that kind of greed seldom works long term.
@ Not long ago he said that the main reason why the labor force participation rate has declined since Covid began is that mostly young people are realizing that it's stupid to work for The System and are leaving their jobs to do their own thing. Well, heck. According to the federal Department of Labor it's mostly because older workers are taking earlier retirement, with a secondary reason being women who had to leave their jobs when schools and day care centers closed.
When I was attending the University of South Alabama, one of the members of the accounting team came and spoke. It was very interesting hearing it from a personal perspective. He said he was absolutely shocked when the suggestion came up to cook the books. Once you do that there is no turning around. He ended up doing about 3 months federal and that was it. A Slap on the wrist.
@@skrounst The main difference is how the robbery is committed. In the seven eleven exchange, the dude probably didn't take the money when the guy wasn't looking. Odds are, he probably brought a gun in, pointed it at the cashier's head and told him to give him everything in the register. If something goes wrong from cooking the books, then there really isn't much worse things that could happen. If something goes wrong from an armed robbery, people could die. Although three months is very low.
@@phabiorules Absolutely, fair enough. There is very little chance that someone gets directly physically hurt. But let's say someone had retirement money invested into HealthSouth, thinking it was a solid investment because it's a huge company with solid returns. Then the company crashes and they lost all their money to retire on. That can cause SERIOUS damage to someone mentally, and financial issues is a leading cause of suicide. For the amount of damage this guy has done to people's lives, he pretty much got off scot-free.
@@phabiorules I disagree, like the guy below you said the damage it does to investors financially and mentally is enough to make the crime equivalent. Bringing a gun is not the same as using a gun, most poor people are pushed to the wall and need money to pay their bills then they commit these robberies, some of them would never use the gun
Living in Birmingham, I remember when this was top of the newscast every day. Scrushy was well-known in this town. A suburban city here even changed the name of the street that lead to a HealthSouth hospital from a pioneering doctor to Scrushy Parkway. Needless to say, they backtracked rather quickly on that decision. Enjoyed the video.
Health South was a huge deal here in Alabama. He made and stole SO much money and was so incredibly rich. He had one of the biggest houses on Lake Martin one of the most expensive places to have property in central Alabama on a man made Lake.
I just took an accounting college class and it was based on the Sarbanes-Oxley Act, and the class didn't mention Healthsouth at all. And none of the websites about it mentioned them either...
@@skrounst that just shows that the criminal enforcement arm of SOX doesnt really have much merit. But idk this might have just been because it was a new law at the time and could have had other success stories with the criminal enforcement
Never mind he got away with it because he made himself known to impoverished churches in the area and helped fund them making him liked by the community who would then be a possible jury member.
Great video. I was young at the time, but HealthSouth is based in Birmingham where I grew up. It was HUGE news at the time! Two things I still remember were a road near my house that had been named in Scrushy's honor that was changed some time later and a large medical center in Birmingham owned by HealthSouth that was under construction at the time the scandal broke. Construction stopped, and the building sat unoccupied and incomplete for over a decade before someone else purchased and completed it.
before i discovered your channel, i knew pretty much nothing about economics or businesses, and didn’t really have any interest in them, but you really make your videos intriguing and they make me feel like i’m really learning something! keep up the great work man it’s awesome
Funny you upload this as I deep dive in to the history of TNA Wrestling and this actually played a big part in it's founding since Health South was originally gonna help fund it.
Knew I'd heard of this company somewhere! In hindsight, it was never going to get any better. TNA, as long as it kept that name, was always going to be at the mercy of the worst people to run a wrestling company: scam artists, egomaniacs, incompetents, brown-nosers...
Great video as always! Love the fact that they're not too long plus very informative... it's also nice hearing someone talk about corporate fraud without sounding so bitter and unpleasant 😁
Honestly it’s really interesting as a business student who studied accounting. Ignorance should be no excuse. There should be verification requirements
I actually had to go here when I was randomly paralyzed and had to learn to walk again in 2016. I'm really young, compared to everyone else that was there at least lol, I was given a charity bed there. I'll be forever grateful to the people that helped me there. I never thought I'd hear about a scandal from this place.
I'm amazed how far they went too, I feel responsibility should have fallen upon Ersnt & Young as well any firm that didn't see this issue. It's astounding what the company got away with.
I think it's really neat that you're covering this story. I'm from Birmingham and used to live in the same neighborhood as Mr. Scrushy. I went to school with his kids and even met him a few times . I remember when this all went down.
You should do a video on the decline of Rite Aid, it’s shocking how they still haven’t went bankrupt after all the screw ups they’ve done since the past two decades. And they closed all their drugstores in our state!
Back in their heyday, we lived a few miles down US-280 from their Birmingham, Ala HQ. It was an impressive edifice on a hillside. Story goes that Scrushy's wife would make regular helicopter trips to Buckhead in Atlanta just to go shopping.
I worked for RIOSA-Health South for 7 years as a respiratory therapist. When Health South bought out NME a lot of changes happened pretty quickly. One I remember very vividly was a representative from HS came in an told us to refer to our 'patients' as 'customers'. That told me what they thought most about-$$$!
Richard lives in my state alabama. He's did some shady stuff had a black church backing him up while in court but after he was acquitted he never went back to help them like he said he would. And now today he's rich as hell his house is amazing. Just unbelievable
@@R32R38 I heard someone say "rich people don't go broke like the rest of us do." They will always have their wealth and other rich assholes back them up.
Wait this place was a Fortune 500 company. There was one near where I live all the way up until 2017 and I thought it was always a one off place. wow ,crazy to learn about the history of a location ,but it make sense why I only ever saw this one building.
This happened in my backyard. They were building a new hospital close to my house & abandoned it because of the scandal fallout. It sat in state of disrepair for years before Grandview group bought it & decided to finish it up. I knew a lot of people who lost jobs because of this scandal. It was no joke. It also was tied up with some really crappy in-state politics. As others have mentioned what trickled out was the lavish lifestyle him and his wife were accustomed to during this get-rich period. They spent their ill-gotten gains like crazy & screwed a lot of folks in the process. I actually got to meat Dr. Andrews there when I was young. They had an awesome floor with signed pics from all the athletes that had come through there for sports medicine related help. It was surreal. Thank you for covering it.
There's a community college in Birmingham that was called the Richard Scrushy building. You can still see the outline of where his name was. Also encompass health is a very fast growing company again in the health sector.
thats crazy you made this video! I have been working for Encompass Health as a Registered Nurse for 5 months now! I always wondered why they changed the name. Thank you :)
"I signed off on the - on the information based on what was provided to me, and what I was told" 9:43. I can't believe that worked to convince the judge that the Sarbanes-Oxley act didn't apply. That's exactly what the act was for! Ignorance is not a legal defense. I think either the judge was bribed, coerced or the two of them belong to The Funny Handshake Club.
I met the Westin Smith during an accounting ethics class! He told us he was staying up all night trying to make the financials balance. Started with pressures to make earnings expectations. Adjusting little numbers here and there until it just got too out of hand. Very interesting guy and story from the inside perspective. They s claimed to have several planes when they actually didn’t.
Healthsouth was also the financial backer for impact wrestling (know as TNA at the time) in 2002 until August of that year until they pulled out due to the accounting scandal investigation
I am a Birmingham / central AL resident for most of my life. Hard to explain how huge this was when it all popped off. Scrushy did tons of dirt, but to be fair he only got in so much trouble because he was a booster for the AL Democratic Party. This is standard-level corruption for Alabama unfortunately.
Hey C-Man. Great video as always. I have an idea. I propose that you do a series that caters to the frequent traveler, or somebody who may be moving states. Because here in Texas, I guess it's the Texan Pride (I'm pretty sure there's a such thing in New York as well), we have a whole bunch of businesses that hardly, if ever, prefer to grow outside of the State of Texas. H-E-B being one of them (the best grocery store ever), Fiesta grocery stores, Whataburger, Taco Cabana, Pappas Restaurants, etc.
This might be nitpicking and I'm not arguing with your analysis but from a legal perspective, I wouldn't call not guilty the same as innocent. Sometimes not guilty means a poor prosecution took place or there wasn't evidence beyond a reasonable doubt, or some technicality nullifies the charge. But that doesn't mean that they did not commit the crime, just that it could not be proven in court.
Well this is interesting. I went on a clinical rotation at one of the rehabilitation facilities that is under the encompass health name. Never knew it had such a history .
"(Hospitals): if you get anywhere near them it can get expensive" I've been hospitalised five times and have had two major surgeries. I've never paid a cent for insurance and I've never paid a cent for healthcare. I simply rested until I was well enough to take care of myself. Keep telling yourself you're number one, America.
During that scandal, they were building what was going to be called “The Digital Hospital”. Then, the shell was abandoned after the scandal, but later on, it was finally put back into good use, and became Grandview Medical Center after being purchased by Community Health Systems.
Never heard of this company until I started listening to the My World Podcast with Jeff Jarrett and Conrad Thompson. HealthSouth was an investor in Total Nonstop Action (TNA) Wrestling (now Impact)
Wow. I actually went to this place after having my first car accident when I was 18 (2000). Got physical therapy there. Crazy watching this and remembering all that.
I attended a HealthSouth 'Go For It!' live show in Portland, O R as a middle schooler in the spring of 2002. I knew later in life they went defunct at some point... but wow, did they screw the pooch on this one! 😳 Also, it might be just me, but their logo and name reminds me a lot of BELLSouth(just add a bell symbol to the left of the name), the 'Baby Bell' phone company that served the Southeast U.S. until AT&T bought them out in 2006.
Scrushy was never a popular or respected figure in much of Alabama. At the former City Stages festival in Birmingham, Scrushy brought a paid band, Dallas County Line, and bought stage time only to make an ass of himself at a major music festival. Scrushy spent money on local churches and paid off several pastors to gain himself the jury that acquitted him.
Wow. I had never heard about this before. Apparently this company started in my hometown and my dad (an athletic trainer) was screwed over by them multiple times.
I was wondering why I had never heard of this company before, it's because when they were found to be committing fraud in 2003, I was 6 years old, 6 year old's don't really care about health companies turns out. It's crazy that they still exist, albeit under a different name after pulling such a huge scandal, it's actually kind of impressive how big companies can survive big scandals, or near bankruptcies like this.
He knew. He just faked ignorance and blamed everyone else. Someone told me that CEOs deserve their high salaries because of the responsibilities they have. Yet when it comes time to BE responsible, it's suddenly everyone else's fault.
Fun fact: One of the guys who used to work here, Weston Smith, has done plenty of talks at my university, Texas Tech. It was a very interesting lecture.
The main reason I was aware of HealthSouth was because they sponsored a show called "Go For It! TV", a kids game show in the spirit of "Guts" and "American Gladiators."
It’s just amazing, did they think they were going to get away with it? I guess if anyone ever has we wouldn’t know but it doesn’t seem like it’s sustainable unless they eventually do make the massive earnings maybe?
I'm betting that last bit was the issue. They were assuming it would turn around "quickly"...but failed to realize that the cheating causes an escalation of issues.
I was in an accident a few years back, I was transferred to healthsouth / encompass health rehabilitation. They were in the middle of the change. I figured it was just a rebranding thing from the hospital. But guess there was a bunch going on
Always a great day when I can learn about a new corporate fraud.
There's a great American Greed about it. Dude tried to be a country music star... like Joe Exotic except this guy actually sang 🤣🤣🤣
Seven Hunnid on RUclips is underrated
The hard lessons need learned, too. Bad actors poison the economy. If you're in business, you do have to watch out for them.
Nothing new about corporate fraud my boy
This guy watching scandal videos to see what not to do… mr. personal finance and investing🤔
I was a HealthSouth inpatient hospital CEO, started working there in 1996. Two weeks after I started that job, the hospital CFO left. He said to me, “I can’t do this anymore. They’re telling me to do things that aren’t appropriate.” I left a year later.
Good on you.
I worked for Healthsouth back in the early 2000s and it was the corporate greed of Scrushy that did in the company. Him and his wife had an extravagant lifestyle to include that he wanted to be in a band so he purchased the band Dallas County Line just so he could be their frontman and let's not even get started on his wife's $15,000 per month expenses on beauty.
The thing I remember most was him inviting a large group to a lunch at the main headquarters. He got up to speak and announced that everyone in attendance were being laid off and if they needed to blame someone, blame their managers. He even had those managers line up at the exit to give the ex-employees handshakes on their way out. Talk about a trash move...
Looked like the wives beauty routine worked
Thanks for the context. I recall the Grandview hospital being left incomplete because of the Scrushy related greed. Also all the stores that came out about him and his wife after the fact. There were truly greedy dillholes that ruined a lot of lives. Glad you made it out.
@@taylorb1356 Appreciate it...Luckily for me I came in briefly after all the drama happened and worked a year long project for Healthsouth getting their imaging clinics software updated so they could be sold. Because of Scrushy they ended up having to divest a lot of their business lines to pay back the debt.
Richard Scrushy should have been court ordered to change the spelling of his last name to Screwshee.
Were you one of the ones who got fired?
You know something is serious when Company Man says it makes him upset. Awesome video as always!
He said it so you would stay interested and not click away.
@@markcarls1896 You honestly think that people would stop watching if he didn't?
Lol
I worked as a physical therapy tech for years at a HealthSouth rehab hospital in the mid 2000's. The fraud was rampant even on the facility level. On Saturdays, they would assign me patients to see. I would do chart review, exercise them, and walk them. Then the physical therapist would do the note as if they did the session and bill the insurance for skilled care. I thought this was normal practice until I got into PT school and found out that this was illegal. I was treating patients without the proper education or license. It is a true miracle I didn't hurt anyone.
I am also a PT. It is crazy to hear about stuff like this especially since they were such a big employer at the time. I was a tech as well before PT school and there is just so much that you need to know to look out for it is a miracle that no one got hurt. I don't know about what you have heard but it seems like at least in my region Encompass has made some improvements from where they were with regards to fraud and quality of care on top of their rebrand.
@@willgresham680 : The HealthSouth facility I worked at was bought out by a local doctor group and totally overhauled. I did some PRN work there everything is above board now. There are only two Encompass locations in Louisiana as I don't live near either I cannot speak to their quality of care
Did you turn yourself in?
A family member of mine used to be the president of a hospital in Birmingham. He once said that HealthSouth was the only people he ever had to basically kick out of the hospital, because their pitch for a merger was so strange and stupid. I still remember being a kid and hearing friends of my parents who were involved in the healthcare and law fields saying that there was definitely something very weird going on at HealthSouth. (This was before the scandal became public. It was just obvious that something wasn't right about the business.) As a resident of Birmingham, Alabama (where HealthSouth was), I can tell you that Richard Scrushy was never liked or respected by many people. He was the "if you don't give me what I want then I wont donate to your charity" type of person. A little brat. I know of at least one country club that refused to accept him for membership because he was such an ass.
He also spread money around churches and bought airtime for a prayer show to buy a jury during his trial. As soon as he walked, he ceased both.
Hello neighbor. I had literally never heard of Healthsouth before and now I know that they were going after my dad, who is an athletic trainer.
It's just inconceivable to me that the Ernst & Young auditors allowed this to happen. I cannot believe it was mere negligence. This wasn't a really sophisticated fraud. It was the kind of stuff we learned about early in our college auditing courses.
@@Grauenwolf I guess that's a good point. I got my undergraduate degree in Accounting, and I do understand that an audit isn't a guarantee. Two of my brothers are CPA's, now retired, and I do remember what the workload is like.
The key thing I’ve learned from all the stories of accounting frauds is that if I want to commit fraud, hire Earnst & Young as my partner. They’ve got my back.
@@Grauenwolf also with the fact a company could basically bribe the auditor staff members by hiring them into the company with better pay and less hours.
@@Grauenwolf I've never understood why the Big Three firms are held in high regard. They're just filled with kids right out of college. Because kids are willing to work long hours for low wages to "get ahead." I speak from personal experience, it takes many years to become a good auditor. I wouldn't trust financial statements audited by a bunch of new graduates who spent the past four or five years drinking and partying.
Almost every corporate fraud has EY as auditors. They give the same sorry excuses over and over again. Last scandal was Wirecard. Guess who audited them for years?
I vaguely remember seeing these everywhere around town. If I'm not mistaken, I think my mom or aunt went there after they were in a car accident. I remember how "big" this company was and it had rave reviews and was all the trend. They rapidly declined and within less than year, they were nonexistent. Had no clue what had to happen to them until now!
My grandmother went there after she broke her hip.
There is a documentary on Netflix called Trial by Media and it shows how he became friendly with impoverished churches in the community after he was charged.
I guess you can say things went south for HealthSouth.
🍅
Had they named it HealthNorth, maybe it wouldn't have encountered these things, who knows 😂
😂😂🤣
Get out of here
Louis Rossman said in a recent video that Rich People would never try to cheat, because it's too much risk and they can afford accountants and lawyers to always keep things above board (a rich person told him this). Yet there are examples like this company man video all the time. I like Rossman's ideas about Right to Repair, but his views on the rich are just naive.
Exactly. I think the problem with his position is that it assumes that rich people are satisfied with the amount of wealth that they already have, and as such have no incentive to try and extract more value, which is simply not the case.
It's also because companies are accountable to more than just individual rich people, but normally collectives of rich people in the form of shareholders, board members, etc. This means that wealth is split amongst these high-ranking individuals, so they proportionately get last, so they always have the individual incentive to extract more welcome the company.
Honestly, it kind of borders on a tragedy of the commons sort of scenario where all the people at the top or acting in their own self-interest without anybody actually focusing on the sustainability of the company, and this in turn eventually kills the profitability for everyone.
The problem with that theory is that he assumes that cheating is always riskier then not cheating...AND he assumes that the accounts and lawyers would keep things above board.
At the same time, having accountants and lawyers also makes it easier to cheat WELL. Furthermore, this case of cheating can be explained rationally.
1. Rational people think short term over long term.
2. IF he doesn't cheat, he loses the company, and risks bankruptcy. If he DOES cheat and doesn't get caught, then the company can survive one more day. If he cheats and gets caught...he loses the company and risks bankruptcy. But, there's a chance his lawyers can get him off...
3. In theory, once the company is back in the black, he can move back to honest accounting. (This theory is flawed)
4. If he cheats, he can afford MORE lawyers and accountants to protect him.
One of my ultra rich clients has internal accountants and an outside accounting firm that work without any interaction for checks and balances. He said that their numbers are frequently far enough off that he'll employ a third firm to go over their numbers. All so he can never be accused of cheating or theft.
In general, Rossman is right. If you want your enterprise to last and your wealth to grow you dont have to cheat if you can work through the rules in a way that favors you. But some people just straight up cheat and get caught eventually so the consequences from those poor choices are inherent. If you actually want to be wealthy and stay wealthy and youre not in the mob you have to obey the rules, if not in the way intended then at least in a way that complies on a purely technical level. That's what lawyers and accountants are for. Cheating is very, very risky and succumbing to that kind of greed seldom works long term.
@ Not long ago he said that the main reason why the labor force participation rate has declined since Covid began is that mostly young people are realizing that it's stupid to work for The System and are leaving their jobs to do their own thing. Well, heck. According to the federal Department of Labor it's mostly because older workers are taking earlier retirement, with a secondary reason being women who had to leave their jobs when schools and day care centers closed.
When I was attending the University of South Alabama, one of the members of the accounting team came and spoke. It was very interesting hearing it from a personal perspective. He said he was absolutely shocked when the suggestion came up to cook the books. Once you do that there is no turning around. He ended up doing about 3 months federal and that was it. A Slap on the wrist.
You steal 40 bucks from a 7-11 you get 2 years... Steal 50,000,000 from stock holders, get 3 months, or NOTHING... Seems about right.
@@skrounst The main difference is how the robbery is committed. In the seven eleven exchange, the dude probably didn't take the money when the guy wasn't looking. Odds are, he probably brought a gun in, pointed it at the cashier's head and told him to give him everything in the register.
If something goes wrong from cooking the books, then there really isn't much worse things that could happen. If something goes wrong from an armed robbery, people could die.
Although three months is very low.
@@phabiorules Absolutely, fair enough. There is very little chance that someone gets directly physically hurt. But let's say someone had retirement money invested into HealthSouth, thinking it was a solid investment because it's a huge company with solid returns. Then the company crashes and they lost all their money to retire on. That can cause SERIOUS damage to someone mentally, and financial issues is a leading cause of suicide. For the amount of damage this guy has done to people's lives, he pretty much got off scot-free.
@@phabiorules I disagree, like the guy below you said the damage it does to investors financially and mentally is enough to make the crime equivalent. Bringing a gun is not the same as using a gun, most poor people are pushed to the wall and need money to pay their bills then they commit these robberies, some of them would never use the gun
Living in Birmingham, I remember when this was top of the newscast every day. Scrushy was well-known in this town. A suburban city here even changed the name of the street that lead to a HealthSouth hospital from a pioneering doctor to Scrushy Parkway. Needless to say, they backtracked rather quickly on that decision.
Enjoyed the video.
He fellow Bhammer. Yeah he was a scumbag & it was big news.
Hey neighbor
Birmingham in the UK or USA?
@@georgie4095
In Alabama, where HealthSouth was headquartered and Scumbag Scrushy lived.
@@georgie4095 US
Health South was a huge deal here in Alabama. He made and stole SO much money and was so incredibly rich. He had one of the biggest houses on Lake Martin one of the most expensive places to have property in central Alabama on a man made Lake.
Along with the older brother on the show The Wonder Years they were all in on it. Hypocrites!
I just took an accounting college class and it was based on the Sarbanes-Oxley Act, and the class didn't mention Healthsouth at all. And none of the websites about it mentioned them either...
Probably because he wasn't convicted of breaking that law. Even though people like him ARE THE REASON the law was written in the first place lol.
@@skrounst that just shows that the criminal enforcement arm of SOX doesnt really have much merit. But idk this might have just been because it was a new law at the time and could have had other success stories with the criminal enforcement
Never mind he got away with it because he made himself known to impoverished churches in the area and helped fund them making him liked by the community who would then be a possible jury member.
While on my break from work this video pops up. I literally pay invoices for places like lifemark. This hits crazy close to home. Great video again.
So you are like #3 in line? First two deny, then pay a percentage?
@@ShainAndrews I live in canada. We usually pay full cost of treatment.
Great video. I was young at the time, but HealthSouth is based in Birmingham where I grew up. It was HUGE news at the time! Two things I still remember were a road near my house that had been named in Scrushy's honor that was changed some time later and a large medical center in Birmingham owned by HealthSouth that was under construction at the time the scandal broke. Construction stopped, and the building sat unoccupied and incomplete for over a decade before someone else purchased and completed it.
before i discovered your channel, i knew pretty much nothing about economics or businesses, and didn’t really have any interest in them, but you really make your videos intriguing and they make me feel like i’m really learning something! keep up the great work man it’s awesome
I’ve been watching u since 100k and I thought to myself damn he’s underrated you’ve worked hard and u deserve it!
Funny you upload this as I deep dive in to the history of TNA Wrestling and this actually played a big part in it's founding since Health South was originally gonna help fund it.
WHAT???
Knew I'd heard of this company somewhere! In hindsight, it was never going to get any better. TNA, as long as it kept that name, was always going to be at the mercy of the worst people to run a wrestling company: scam artists, egomaniacs, incompetents, brown-nosers...
Southerners love wrestling.
Great video as always! Love the fact that they're not too long plus very informative... it's also nice hearing someone talk about corporate fraud without sounding so bitter and unpleasant 😁
Despite that I work for this company ( well for the company that bought it out ), I got excited seeing you making a video about this!
you have become a staple of 'stuff i watch when im bored in the bath' the highest honour i can give
This was going on for years beforehand, and my mom, a physician at one of the clinics, was fired for exposing it.
Honestly it’s really interesting as a business student who studied accounting.
Ignorance should be no excuse. There should be verification requirements
I actually had to go here when I was randomly paralyzed and had to learn to walk again in 2016. I'm really young, compared to everyone else that was there at least lol, I was given a charity bed there. I'll be forever grateful to the people that helped me there. I never thought I'd hear about a scandal from this place.
I'm amazed how far they went too, I feel responsibility should have fallen upon Ersnt & Young as well any firm that didn't see this issue. It's astounding what the company got away with.
See a new video from company man, immediate compulsion to watch :3 Great video as always.
I think it's really neat that you're covering this story. I'm from Birmingham and used to live in the same neighborhood as Mr. Scrushy. I went to school with his kids and even met him a few times . I remember when this all went down.
You should do a video on the decline of Rite Aid, it’s shocking how they still haven’t went bankrupt after all the screw ups they’ve done since the past two decades. And they closed all their drugstores in our state!
Back in their heyday, we lived a few miles down US-280 from their Birmingham, Ala HQ. It was an impressive edifice on a hillside. Story goes that Scrushy's wife would make regular helicopter trips to Buckhead in Atlanta just to go shopping.
Awesome video. You should check out the scandal at Taylor, Bean and Whitaker mortgage firm. It was pretty salacious too.
I don't understand. What's the point of having a law if the CEO can just go 'oh well I didn't know' and he doesn't get punishment?
You mean to tell me a corporate conglomerate isn’t honest? What a surprising development.
YEAH MORE COMPANY MAN!
Whenever he says “I’d like to hear what you have to say.” at the end of videos it reminds me of the same tone my parents or teachers used.
I love this channel so much and I don’t know why!!! I majored in music! This content is just so interesting!
I worked for RIOSA-Health South for 7 years as a respiratory therapist. When Health South bought out NME a lot of changes happened pretty quickly. One I remember very vividly was a representative from HS came in an told us to refer to our 'patients' as 'customers'. That told me what they thought most about-$$$!
That’s crazy how shady the CEO was! I didn’t inow about this scandal until I saw it on your channel.
Amazing to see a company I worked for featured on Company Man!
Richard lives in my state alabama. He's did some shady stuff had a black church backing him up while in court but after he was acquitted he never went back to help them like he said he would. And now today he's rich as hell his house is amazing. Just unbelievable
He must have had some $$$ squirreled away.
@@R32R38 I heard someone say "rich people don't go broke like the rest of us do." They will always have their wealth and other rich assholes back them up.
@@nitehawk86 if you want a even better video AMERICAN GREED aired a episode on him
Totally forgot he got hit with Don seaglmen (governor) for bribery
What a throwback! There was a HealthSouth by a bowling alley on the southwest side of Fort Worth. It is burned into my childhood brain.
You should make a video on the rise and fall Friendlys!
Yes that would be a good one
It’s been years since I last thought of that chain
That sounds like a great idea! i'd love to see a video on them.
Too soon. There's a Dunkin' Donuts now where my childhood Friendly's was. It's just... not the same.
@@themiddlecase I know how you feel man.
Wait this place was a Fortune 500 company. There was one near where I live all the way up until 2017 and I thought it was always a one off place. wow ,crazy to learn about the history of a location ,but it make sense why I only ever saw this one building.
Probably the one near you was one of the last surviving ones
This happened in my backyard. They were building a new hospital close to my house & abandoned it because of the scandal fallout. It sat in state of disrepair for years before Grandview group bought it & decided to finish it up. I knew a lot of people who lost jobs because of this scandal. It was no joke. It also was tied up with some really crappy in-state politics. As others have mentioned what trickled out was the lavish lifestyle him and his wife were accustomed to during this get-rich period. They spent their ill-gotten gains like crazy & screwed a lot of folks in the process.
I actually got to meat Dr. Andrews there when I was young. They had an awesome floor with signed pics from all the athletes that had come through there for sports medicine related help. It was surreal.
Thank you for covering it.
We still want that fan requested video please!!
'RUclips - Why They're Hated"
There's a community college in Birmingham that was called the Richard Scrushy building. You can still see the outline of where his name was. Also encompass health is a very fast growing company again in the health sector.
thats crazy you made this video! I have been working for Encompass Health as a Registered Nurse for 5 months now! I always wondered why they changed the name. Thank you :)
"I signed off on the - on the information based on what was provided to me, and what I was told" 9:43. I can't believe that worked to convince the judge that the Sarbanes-Oxley act didn't apply. That's exactly what the act was for! Ignorance is not a legal defense. I think either the judge was bribed, coerced or the two of them belong to The Funny Handshake Club.
I remember when they changed the name of Scrushy Blvd. and the name of the Jefferson State Community College campus. This was such a huge deal here.
I hate American health care with a burning passion.
Make a video of the success of Heb, they run Texas! They made national news multiple times and everyone loves them here. Heb has a hardcore following.
Never heard of heb
I met the Westin Smith during an accounting ethics class! He told us he was staying up all night trying to make the financials balance. Started with pressures to make earnings expectations. Adjusting little numbers here and there until it just got too out of hand. Very interesting guy and story from the inside perspective. They s claimed to have several planes when they actually didn’t.
My mother went to a health south center.
They had a pool for therapy. Something we had never seen before or since
Hi company man your videos and they are really interesting
I do agree with you about that
I remember being a patient of HealthSouth back in the day as well as their financial scandal. Thanks for your always entertaining content.
Healthsouth was also the financial backer for impact wrestling (know as TNA at the time) in 2002 until August of that year until they pulled out due to the accounting scandal investigation
I am a Birmingham / central AL resident for most of my life. Hard to explain how huge this was when it all popped off. Scrushy did tons of dirt, but to be fair he only got in so much trouble because he was a booster for the AL Democratic Party. This is standard-level corruption for Alabama unfortunately.
Hey C-Man. Great video as always.
I have an idea. I propose that you do a series that caters to the frequent traveler, or somebody who may be moving states. Because here in Texas, I guess it's the Texan Pride (I'm pretty sure there's a such thing in New York as well), we have a whole bunch of businesses that hardly, if ever, prefer to grow outside of the State of Texas. H-E-B being one of them (the best grocery store ever), Fiesta grocery stores, Whataburger, Taco Cabana, Pappas Restaurants, etc.
The scandal series is great! Any chance of making an updated Theranos video, detailing more of Elizabeth Holmes’s trial?
Not worth his time. Some scandals are better left untouched.
This and the American Greed episode on HealthSouth is pretty detailed, but this comment section adds so much to it to people's personal accounts.
Great video. I think there is fraud in every large corporation; the CEO's are just too greedy.
This might be nitpicking and I'm not arguing with your analysis but from a legal perspective, I wouldn't call not guilty the same as innocent. Sometimes not guilty means a poor prosecution took place or there wasn't evidence beyond a reasonable doubt, or some technicality nullifies the charge. But that doesn't mean that they did not commit the crime, just that it could not be proven in court.
Well this is interesting. I went on a clinical rotation at one of the rehabilitation facilities that is under the encompass health name. Never knew it had such a history .
"(Hospitals): if you get anywhere near them it can get expensive"
I've been hospitalised five times and have had two major surgeries. I've never paid a cent for insurance and I've never paid a cent for healthcare. I simply rested until I was well enough to take care of myself.
Keep telling yourself you're number one, America.
Week 2 of respectfully asking for a video on the southern fast food chain “Cook Out”
These are my favorite videos of yours!
Always a good day when you upload. Thank you for the awesome content!
They went South quickly.
I really enjoy these videos about fraud.
During that scandal, they were building what was going to be called “The Digital Hospital”. Then, the shell was abandoned after the scandal, but later on, it was finally put back into good use, and became Grandview Medical Center after being purchased by Community Health Systems.
Never heard of this company until I started listening to the My World Podcast with Jeff Jarrett and Conrad Thompson. HealthSouth was an investor in Total Nonstop Action (TNA) Wrestling (now Impact)
I had an aunt that was there until she passed in 2003 over at the Chattanooga, TN, location
Awesome information thank you very much.
As a Birmingham resident at the time that empty building was a nice reminder for a long time
That's just the surface of the amount of corruption in the medical industry. Most of which is motivated by profit.
Wow. I actually went to this place after having my first car accident when I was 18 (2000). Got physical therapy there. Crazy watching this and remembering all that.
I remember this company well. This was a huge story in Alabama.
I’m from Birmingham, AL this Scandal rocked the city.
HealthSouth... My broken femur in 1998 at age 22 exceeded my lifetime benefit, I still have a limp to this day.
I attended a HealthSouth 'Go For It!' live show in Portland, O R as a middle schooler in the spring of 2002.
I knew later in life they went defunct at some point... but wow, did they screw the pooch on this one! 😳
Also, it might be just me, but their logo and name reminds me a lot of BELLSouth(just add a bell symbol to the left of the name), the 'Baby Bell' phone company that served the Southeast U.S. until AT&T bought them out in 2006.
Scrushy was never a popular or respected figure in much of Alabama. At the former City Stages festival in Birmingham, Scrushy brought a paid band, Dallas County Line, and bought stage time only to make an ass of himself at a major music festival. Scrushy spent money on local churches and paid off several pastors to gain himself the jury that acquitted him.
Wow. I had never heard about this before. Apparently this company started in my hometown and my dad (an athletic trainer) was screwed over by them multiple times.
I know it's a little bit different than what you normally do, but you should really cover the Birmingham sewer scandal.
Yes. Full of stinkiness (pun intented).
Birmingham water works is corrupt!
I was wondering why I had never heard of this company before, it's because when they were found to be committing fraud in 2003, I was 6 years old, 6 year old's don't really care about health companies turns out. It's crazy that they still exist, albeit under a different name after pulling such a huge scandal, it's actually kind of impressive how big companies can survive big scandals, or near bankruptcies like this.
He knew. He just faked ignorance and blamed everyone else. Someone told me that CEOs deserve their high salaries because of the responsibilities they have. Yet when it comes time to BE responsible, it's suddenly everyone else's fault.
The Scrushy mansion, on beautiful Lake Martin (Alabama) used to be Alabama's most expensive home! 🏰
Fun fact: One of the guys who used to work here, Weston Smith, has done plenty of talks at my university, Texas Tech. It was a very interesting lecture.
I usually watch your videos at 1.5 speed but youtube today loaded it at normal speed. I got confused why the intro sounded so weird hahaha.
company boi back at it again
Was repairing medical equipment at a former healthsouth facility today. Wild
Hey, Company Man. You should definitely do a video on Walmart. I want to know how did the largest retail store get so big.
I remember when this happened I was a kid when it happened, but it was in my home town and that was all that was talked about for several years.
The main reason I was aware of HealthSouth was because they sponsored a show called "Go For It! TV", a kids game show in the spirit of "Guts" and "American Gladiators."
Wow, no justice :/ learning about these frauds was very interesting at first but now I get depressed learning how little gets done about them
Oh, yes. Being from Montgomery, AL, not far from Birmingham at all, this is all too familiar!
It’s just amazing, did they think they were going to get away with it? I guess if anyone ever has we wouldn’t know but it doesn’t seem like it’s sustainable unless they eventually do make the massive earnings maybe?
I'm betting that last bit was the issue. They were assuming it would turn around "quickly"...but failed to realize that the cheating causes an escalation of issues.
I mean he did technically get away with it
I was in an accident a few years back, I was transferred to healthsouth / encompass health rehabilitation. They were in the middle of the change. I figured it was just a rebranding thing from the hospital. But guess there was a bunch going on
Yes, please branch out your videos. More content the better. 💙
I knew a lady that worked for Healthsouth for many years in Birmingham, Al. She said everyone lost their 401k . So sad.
Thanks for the Upload 👍!! I stayed There for 2 years in a row !! XD