Ex-HealthSouth VP Implicates Two in Scam
Monday May 9, 4:18 pm ET
By Jay Reeves, Associated Press Writer
Former HealthSouth VP Implicates Two More Former Executives in Saudi Bribery Scam
BIRMINGHAM, Ala. (AP) -- A former HealthSouth Corp. vice president implicated two more former executives Monday in what prosecutors describe as a scheme to pay bribes for a $50 million deal to run a hospital linked to Saudi Arabia's royal family.
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Vincent Nico said Robert Thomson and James Reilly, on trial jointly in the alleged conspiracy, each had roles arranging payments to Dr. Rashid Aba-Aklheil, the director of the Sultan Bin Abdulaziz Al-Saud Foundation, which built the 450-bed hospital near Riyadh.
The Saudi royal family funds the foundation, authorities say.
Nico, one of two former executives to plead guilty in the kickback plan, testified that he told Thomson of Rashid's request for a "finder's fee." Reilly suggested filtering the money through a HealthSouth affiliate in Australia by calling it a consulting contract, he said.
But under cross-examination, Nico confirmed telling the FBI last week that he believed HealthSouth would have gotten the contract even without the payments to Rashid.
Nico also wavered from earlier testimony that Rashid first called him asking for money. Under defense questioning, Nico said he couldn't remember whether Rashid first called him or Jeff Garber, HealthSouth's former administrator of the hospital.
"But I did talk to Dr. Rashid," said Nico, who got $375,000 in kickbacks through the five-year, $10 million-a-year deal, signed in 2000.
Prosecutors claim Thomson and Reilly agreed to pay kickbacks of $500,000 annually for five years to Rashid in exchange for HealthSouth receiving the contract to manage the Saudi Arabian hospital.
The defense argues Rashid was paid legally under a legitimate consulting agreement.
Thomson is a former president and chief operating officer of HealthSouth's inpatient division. Reilly was a vice president for legal services.
Another former HealthSouth executive, Thomas Carman, also pleaded guilty and is expected to testify against Thomson and Reilly.
Auditors uncovered the payments while investigating a larger scheme to overstate earnings at HealthSouth. Former chief executive officer Richard Scrushy is on trial in a separate courtroom in the accounting fraud.
Besides conspiracy, Thomson and Reilly are charged with securities violations and traveling outside the country to commit a crime.
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