FORMER HEALTHSOUTH EXECUTIVE RE-SENTENCED IN FEDERAL COURT

BIRMINGHAM, AL - United States Attorney Alice H. Martin of the Northern District of Alabama, Carmen S. Adams, Special Agent in Charge, Federal Bureau of Investigation, James D. Vickery, Special Agent in Charge, Internal Revenue Service - Criminal Investigations, and Jeff Koperniak, Postal Inspector/Domicile Coordinator, United States Postal Inspection Service, announce that MICHAEL D. MARTIN, former Chief Financial Officer of HealthSouth Corporation, was sentenced today for his role in the fraud perpetrated at that corporation.

MARTIN, 46, of Birmingham, Alabama, was sentenced by United States District Judge L. Scott Coogler to 36 months imprisonment, a $50,000 fine, and a two (2) year supervised release term after the jail term is served. MARTIN was also ordered to forfeit $2,375,000 in illegal proceeds acquired from his criminal activity, and was ordered to begin his prison sentence on October 12th. MARTIN pleaded guilty to conspiracy and securities fraud on April 8, 2003.

MARTIN served as Chief Financial Officer of HealthSouth from late 1997 to early 2000, and was a key participant in hiding the fraud from investors and regulators. In that position, MARTIN was aware of the ongoing fraud and signed numerous financial statements that he knew falsely stated the company's true financial condition.

"Today, the court imposed a just sentence that struck a balance between the fact that Mr. Martin provided substantial assistance to the government throughout our investigation of the fraud at HealthSouth and the serious nature of his offenses," said U.S. Attorney Alice H. Martin. "This sentence sends a clear message to officers of all publicly-traded corporations that violations of the financial reporting requirements that serve to protect investors will not be tolerated."

Today's hearing was actually the third time MARTIN had been sentenced in this case. MARTIN was originally sentenced to five years probation by Chief Judge U.W. Clemon in June 2004. After the government appealed that sentence, the Eleventh Circuit Court of Appeals vacated the sentence and sent the case back to Judge Clemon for re-sentencing. At the second sentencing in September 2005, Judge Clemon imposed a seven day jail sentence, and the government again appealed. In July, the Eleventh Circuit again vacated the sentence but ordered that the sentencing be handled by another judge.

These cases were investigated by Special Agents of the Federal Bureau of Investigation, Internal Revenue Service, and Postal Inspection Service.