A medical entrepreneur from Alabama is facing charges that he ran an elaborate scheme to defraud shareholders of $2.7bn (£1.6bn; €2.3bn), by devising fake assets and overstating earnings.
In March this year agents from the Federal Bureau of Investigation raided the Birmingham offices of HealthSouth, a national chain of almost 2000 medical clinics and hospitals specialising in rehabilitation.
As a result of that raid the former chief executive officer Richard Scrushy last week appeared in a federal court to hear the 85 charges against him. He was then forced to forfeit his passport and the keys to his private jet before being released on bail of $10m. Mr Scrushy says he is innocent of the charges and looks forward to proving it when his case returns to court in January.
Mr Scrushy is one of the first chief executives to be criminally charged under laws—introduced in the United States after the Enron scandal—that carry tough penalties for people who lie about company accounts. If convicted he faces tens of millions of dollars in fines and dozens of years in jail.
HealthSouth is also facing a number of probes, including an investigation by federal health authorities into whether it has fraudulently overcharged Medicare for services provided to retired Americans.
The case is just the latest in a series of scandals in the United States involving private healthcare corporations and drug companies overcharging the publicly funded health insurance system for services and drugs.
The Tenet healthcare corporation recently paid out more than $50m to settle allegations that its heart surgeons were operating on patients unnecessarily. In 2000 the hospital giant Columbia/HCA settled for $745m allegations of overbilling.
In 2001 TAP Pharmaceuticals, a joint venture owned by the US drug firm Abbot Laboratories and Japan's Takeda, paid out almost $900m in criminal and civil damages for paying kickbacks to doctors to prescribe the most costly drugs rather than the most cost effective drugs.
Fourteen executives have already pleaded guilty to various charges of falsifying accounts at HealthSouth.
Mr Scrushy lives a flamboyant lifestyle. Along with his hundreds of millions in bonuses and share sales, his private jet, and his 27 m yacht, he sponsored a “girl band” called 3rd Faze and hired a former child TV star, Jason Hervey, to run the health company's public relations arm.
At hearings before a Congress committee investigating the scandal last Wednesday, the company's board members, bankers, and auditors were forced to explain how they had not noticed the $2.7bn fraud. According to a committee member, Diana DeGette, one of the main problems with HealthSouth was that the board was “riddled with conflicts of interest.”