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HealthSouth inquiry snares Pinellas man

Published March 9, 2004

A former HealthSouth executive from Palm Harbor has been charged with taking $375,000 in kickbacks for directing money illegally to a hospital executive in Saudi Arabia.

Vincent Nico, 47, was charged with wire fraud last week in U.S. District Court in Birmingham, Ala., where HealthSouth Corp. has its headquarters.

Prosecutors say Nico profited from a phony consulting contract that he set up for the director of a hospital foundation in Saudi Arabia. The director, who is not named in court documents, negotiated a lucrative staffing and management contract with HealthSouth.

The director also demanded a seven-figure finder's fee for his work. Nico is charged with arranging to pay that fee through a bogus $500,000-per-year consulting contract and getting a cut of the director's fee in return.

Nico has agreed to plead guilty to the single charge and cooperate in a wider federal investigation of HealthSouth in exchange for a recommendation of an 18-month prison sentence, according to the plea agreement. He faces up to 20 years in prison.

Nico has also agreed to pay back roughly $1-million he received from the illegal kickbacks and a performance bonus from HealthSouth. His attorney, Jack Fernandez of Tampa, said Monday that Nico would not comment on the charges.

Another HealthSouth executive, Thomas Carman, 52, of Birmingham also was charged in the scheme. Carman, a former executive vice president, agreed to plead guilty to making a false statement to the FBI when he told agents the consulting contract was legitimate.

Nico lives in the Lake Valencia East development in a modest home assessed for tax purposes at $122,000. He was hired by HealthSouth in 1990 as an administrator for its Largo rehabilitation hospital. He worked his way up to vice president-surgery centers, and was part of a team of executives negotiating a contract with a new hospital in Saudi Arabia in early 2000.

The contract was with the Sultan Bin Abdul Aziz Foundation, which is funded by members of the Saudi royal family. The foundation began building a 450-bed hospital in Riyadh, Saudi Arabia, in 1998.

HealthSouth agreed in October 2000 to staff and manage the hospital for five years for $10-million a year.

In June 2000, according to prosecutors, the foundation's director asked for $1-million in exchange for bringing the hefty contract to HealthSouth.

Despite warnings from an outside attorney against any "back door" payments to the director, a group of HealthSouth officers including Nico and Carman agreed to pay the director $500,000 a year for five years. The money was funnelled to the director through a bogus consulting contract with an Australian company affiliated with HealthSouth, prosecutors allege. In return, Nico was paid $125,000 each year by the director, prosecutors say. He did not disclose the agreement to HealthSouth.

Meanwhile, in fall 2002, Nico asked HealthSouth to pay him a bonus for scoring the contract with the Saudi hospital. In January 2003, he received a bonus that totaled $631,502 after taxes.

That summer, a new HealthSouth management team noticed the irregular payments to the Saudi director and notified the Department of Justice, according to a statement from the company.

Nico was fired in August 2003. The company terminated the contract with the foundation and, in January, began a new contract.

Last week's charges are part of a larger federal investigation into fraud at HealthSouth. Thus far, Charges have been filed against 16 other former executives. Former chief executive Richard Scrushy faces 85 criminal counts for his alleged role in the scheme to defraud investors and others.

- Times researcher Cathy Wos contributed to this report. Nora Koch can be reached at 727771-4304 or

[Last modified March 9, 2004, 01:35:32]

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