Although Scrushy was acquitted of criminal charges, last month a judge's ruling in a shareholder lawsuit held Scrushy liable for fraud which ordered him to pay $2.9 billion in damages. When the fraud was uncovered in 2003, HealthSouth was nearly forced into bankruptcy.Despite McVay's pleas to stay out of prison, U.S. District Judge Inge Johnson ordered him to 3 months in prison after McVay had pleaded guilty in a scheme to inflate earnings six years ago and served five years on probation and six months of house arrest.
Since the 11th U.S. Circuit Court of Appeals agreed with prosecutors that the penalty was too lenient, Judge Johnson ordered McVay to prison.
McVay was among five finance chiefs who pleaded guilty to crimes while working under Richard Scrushy, the former HealthSouth CEO. The fraudulent reports, aimed at meeting Wall Street forecasts, were sent to federal regulators between 1996 and 2002.
McVay has said he was promoted to chief financial officer at HealthSouth in late 2002 and signed a phony earnings statement rather than lose his job, which paid him $400,000 a year.