CORPORATE CRIME REPORTER
Alice
Martin: Judge Clemon Soft on White Collar Crime,
Seven Day Jail Sentence “Intellectually Dishonest”
19
Corporate Crime Reporter 45(10), November 15, 2005
The U.S. Attorney in Birmingham, Alabama is not a happy camper.
Earlier this year, her showcase white-collar crime prosecution against former
HealthSouth CEO Richard Scrushy went down in flames when a jury found Scrushy
not guilty on all counts.
And while her office has convicted 17 HealthSouth executives, only three have
been sentenced to jail – and only one has served time.
Judge Robert Propst sentenced Weston Smith to 27 months in jail.
Judge Inge Johnson sentenced Emory Harris, an assistant controller – one
of the lowest of the 17 on the HealthSouth
totem pole – to five months in prison. He has served his sentence.
And then there is former HealthSouth CFO Michael Martin.
Michael Martin was at the center of the $2.6 billion fraud at HealthSouth.
Originally, Chief Judge U.W. Clemon sentenced Martin to five years of probation.
The court of appeals told Judge Clemon – not enough.
Do it again.
So, in September, Judge Clemon sentenced Martin to seven days in jail.
A whole week.
Anything longer would be unfair, Judge Clemon said.
After all, Judge Clemon reasoned, federal prosecutors said that Richard Scrushy
was the lead fraudster – and he was tried and found not guilty.
The U.S. Attorney – Alice Martin – was not amused.
“It makes no sense,” she told Corporate Crime Reporter in
an interview. “It is intellectually dishonest. If you have a bank robbery,
and three people rob the bank but law enforcement only catches and prosecutes
two, do you say – well, gosh, because we didn't catch the third, we can't
send these two to jail?”
“Mike Martin was the CFO, he was the longest serving CFO during this fraud,”
she said. “And he made tremendous profit – in fact, I believe the
most personal profit of any of these officers prosecuted. And he deserved jail
time. I don't know why certain judges want to be soft on white-collar crime.
It sends a horrible message to the public.”
And Martin said that she was disappointed that only three of the 17 convicted
HealthSouth defendants were sentenced to prison.
Judge Clemon sentenced all the remaining defendants to probation or probation
and home detention.
“Jail sentences would have been appropriate for these cases,” she
said. “And we requested jail – a period of incarceration –
for all defendants in HealthSouth, other than the four women who were in the
accounting department who actually made the entries. For those women, my recollection
is that we did not take a position. But for all others that held higher office,
we advocated for jail time.”
Martin also defended the government’s prosecution of Scrushy.
“In the end, I think that we did show an abundance of evidence, but the
jury found that we didn't prove it beyond a reasonable doubt,” Martin
said. “ I really believe that this jury held the government to a much
higher standard – beyond all doubt.”
Martin said that during post-verdict interviews, “ten of the twelve juries
told us they thought Richard Scrushy was guilty, but that the government didn't
prove the case beyond a reasonable doubt.”
“And then when asked – what were your doubts? – and different
ones said different things, but in short – you just didn't answer all
of my questions.”
“One juror said – you have to answer all of my questions, because
if I have any question about anything, then I can't vote for guilty.”
“Another said – I had one question, and you didn't answer that question,
so I had to find not guilty. We did hear that some felt certain cooperators
lacked credibility. And they were concerned that these cooperators were lying
to drag Richard Scrushy down. They would said – if they could fool Ernst
& Young, the auditors, maybe they fooled Richard Scrushy.”
“But then you would say – what did you think of the documents? And
they would say – I really felt he was guilty, but because you didn't show
us a fingerprint on the document, maybe he didn't get the document, even though
the executives who testified against him said he did.”
When asked about one Justice Department prosecutor who had major run-ins with
the trial judge at the Scrushy trial – a prosecutor who defense attorneys
believe blew it for the prosecution – Martin had this to say:
“Sometimes you get up to the plate and hit a home run. Other times, you
get up to the plate and misread the pitches and you strikeout.”
(For a complete transcript of the question/answer format interview, see “Interview
with Alice Martin,” 19 Corporate Crime Reporter 45 (10-16), November
21, 2005, print edition only)
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