News of massive accounting fraud at HealthSouth broke in the spring of 2003. Headlines nationwide called attention to the billions in fraud and Securities and Exchange Commission investigations of top management. Two and a half years later, HealthSouth’s first chief financial officer, Aaron Beam, headed to prison for felony. This wasn’t how the story was supposed to go and Beam made sure that this was also not the end of the story.

“I will only be remembered as a felon, as the guy who cooked the books at HealthSouth,” Beam said Tuesday in a speech to students of the U. Nebraska-Lincoln College of Business Administration.

Beam co-founded HealthSouth, which would grow to be the nation’s largest provider of outpatient surgery and rehabilitative services, the largest company in Alabama and a Fortune 500 company.

With success came pressure; Beam compared this to a sports team when talking Tuesday at the Lied Center for Performing Arts. After a team wins its first five games, fans aren’t satisfied. They want the team to win all the games. In the business world, Wall Street and investors always wants good numbers, especially once a company is public (selling shares of ownership to new investors).

To please Wall Street, HealthSouth took a dangerous path that started with changing accounting numbers legally, but in ways that did not follow good accounting principles. This behavior was corrosive and unethical, Beam said, but at the time he didn’t look at it that way. He could live with the decisions he was making.

“Money will change you,” Beam said.

In 1996, HealthSouth faced the realization that there was no accounting trick that could create the revenue Wall Street wanted. Former CEO Richard Scrushy told Beam and his chief accountant that reporting bad numbers was not an option.  They made the decision to cook the books by creating false revenue and assets.

“I convinced myself that it’d be a one-time problem … it seemed like the better option because stock prices would stay up, investors wouldn’t get hurt and we wouldn’t do it a second time,” Beam said. “I almost immediately knew I had made a terrible mistake.”

Beam quickly went downhill. He couldn’t sleep. He began to drink more than he should and he didn’t like to go to work. As HealthSouth continued to cook its books, he knew he had to get out. After four financial quarters, he left.

“I didn’t want to keep doing the fraud,” Beam said. “My overall reason wasn’t for my overall financial benefit. I did it to please my boss, investors and Wall Street. That became very hollow because I couldn’t take any pleasure achieving criminal goals.”

He retired to southern Alabama and after selling his stock in HealthSouth, he bought 25 acres of land where he and his wife were going to build their ultimate retirement home, complete with a football field in the backyard.

At first, Beam jumped every time the phone or doorbell rang, sure that it was the FBI. As the years went by, he stopped worrying. He figured the fraud at HealthSouth had ended.

In March 2003, his life changed. He saw the evening news out of Birmingham, Ala. that a massive accounting fraud had been discovered at HealthSouth in the billions.

“My knees buckled. I couldn’t believe it. I was shocked. I had let myself believe the fraud had stopped. I knew my life wouldn’t be fun,” he said.

Beam turned himself in to the federal government and told them what he knew of the fraud.

He quickly learned that he could go to jail for up to 30 years and be fined massive amounts as he faced mounting legal fees. His wealth began to disappear. He no longer received retirement checks from HealthSouth. In his first meeting with his attorney, he signed over $100,000.

In Beam’s estimation, the scandal was the second biggest news story in the history of Birmingham. Day after day, it was front-page news. One morning he bought a newspaper and the clerk looked down at the paper and said, “That’s you, isn’t it?”

Beam replied, “Yes, that’s me.”

Ultimately, Beam pled guilty and was sentenced to three months in federal prison along with fines, monetary forfeiture and probation. Beam doesn’t know why he got such a light sentence compared to others involved.

“I feel like if I was objective, I’d think, ‘he didn’t get enough time,’ but I’m human, I didn’t volunteer to go to prison for any extra time,” Beam said. “Would it have served any purpose for me to serve longer? I don’t think so.”

Beam went to a federal minimum security prison.

“It’s humiliating and embarrassing to your family. You lose what you learned all your life, your freedoms.  You have no rights,” Beam said.  “I can’t imagine what it would have been like to be there for three or four years.”

After prison, Beam went to community college, got a degree in turf management and started a lawn mowing business. He’s working on trying to save enough money to re-retire. At his wife’s suggestion, he began speaking and sharing his story with others.

“I think others can learn from his story about the price someone has to pay for making the wrong decision,” said Janice Lawrence, an associate professor in the school of accountancy and director of the Business Ethics Program.

The College of Business Administration has brought in an ethics speaker in each year since 1998.

Stephen Busch, a sophomore management major, said he learned that ethics play a bigger role in the business world than he had realized.

“Greed and unethical business behavior was bigger than HealthSouth. It’s a massive problem throughout the fabric of the business culture,” Beam said. “I really hope that I will be a little message in the back of (the students’) heads all through their business careers, and when they are asked to commit fraud, they will remember my speech and it will be the tipping point to do the right thing.”