Scrushy criminal trial

It firmly opposes lifting the SEC ban. In phone interviews last week, Scrushy said the Patient Protection and Affordable Care Act, known as Obamacare, had created a period of opportunity in the healthcare industry. But Scrushy said the officer and director ban is holding him back. He said that when he tried to discuss business ideas with a financial firm last year, he was told he could not get financing while the officer and director ban was in place.

So in May, he asked a federal judge in Alabama to lift the ban. Scrushy still forcefully denies having done anything wrong at HealthSouth, and blames subordinates for its troubles. Parkman had a starring role in the federal criminal trial in , pulling out a cartoon drawing of a rat during closing arguments to depict a former HealthSouth finance chief, Bill Owens.

The civil trial will likely get more interesting this week. Temporarily free from federal prison and jailed in a county lockup near Birmingham, Scrushy will take the stand to testify in his own defense. He will deny any role in the HealthSouth fraud, his lawyers have said, and blame it all on the 15 former HealthSouth executives who pleaded guilty in the scandal.

But true to form for the case, Scrushy's testimony will make a limited splash. The judge plans to temporarily shift the trial from the county courthouse to the nearby federal courthouse while Scrushy is on the stand, a move that will prevent TV cameras from filming the shackled former executive because the entrance used for prisoners is shielded from public view.

Home Local Crime State. Scrushy civil case far cry from criminal trial. Scrushy did not take the stand in his own defense, but his lawyers argued at trial that other former HealthSouth executives committed the fraud without Scrushy's knowledge. Other executives faced with similar charges, including former WorldCom CEO Bernard Ebbers, have used the same defense and were convicted.

This may be the first time that the Sergeant Schultz defense has worked. Frenkel said it's too early to know what impact last week's juror switch had on the deliberations. Given that the jury had earlier told Judge Bowdre that it could not agree on a verdict, the assumption is that the shakeup was significant.

Twardy said drawn-out deliberations typically point to an acquittal. After the verdict, Scrushy emerged from the Hugo L. Black courthouse looking the same as he did before he entered to hear his fate: calm. Scrushy, a well-known figure in Birmingham and host of his own television show, made it clear that he considers himself to be the victim of overzealous prosecutors.

Scrushy said that, now that he has his acquittal, "I'm going to let my family get theirs. Minutes later, Alice Martin, the lead prosecutor and the U. Attorney for the Northern District of Alabama, told reporters that she was "shocked" and "disappointed" by the verdict, but acknowledged that government lawyers failed to make their case that Scrushy had willfully engaged in criminal conduct. Martin declined to speculate about any mistakes she and her team may have made, saying she could not know until the jurors discuss their deliberations.

She said, however, that prosecutors would appeal the counts brought against Scrushy, including a perjury charge, that Judge Bowdre dismissed. As a parade of witnesses has testified in federal court here to Mr. Scrushy's knowledge of the HealthSouth fraud, he and his attorneys have mounted a righteous rejoinder. They've pilloried government witnesses for their moral failings, while casting Mr. Scrushy as a target of overzealous prosecutors lost in their own complex accounting theories.

Scrushy has been preaching regularly for months at fundamentalist churches and appearing daily in a Scripture-laced morning TV show. Prosecutors privately contend it's all a bid for sympathy in this Bible Belt city, or an effort to reach jurors indirectly through family or friends. Scrushy denies it is anything of the sort, as do his attorneys.

Scrushy's TV talk show each weekday before court, at least Christian ministers have been guests over the last year, by his count. Clergymen often accompany Mr. Scrushy to court. So do churchgoers such as Mona Beck, who spends much of her time there reading from a Bible in her lap and praying.

His preaching is often at churches with large African-American congregations. Of the 12 jurors and four alternates, nine are African-Americans. His preaching "isn't about influencing jurors," Mr. Scrushy says in an interview. Scrushy as an opportunistic convert, religion has long been part of his life. As an year-old, he accepted Jesus as his savior during a seven-day church revival in his native Selma, Ala. Ten years later, he attended Bible studies at friends' houses that discussed the teachings of Jesus in the context of the Civil Rights movement, according to a friend, John Tabor.

The unexplained dismissal of a juror last month resulted because the juror belonged to a church where Mr. Scrushy had preached, say two lawyers familiar with the case. They signaled this intention in September , just before prosecutors obtained an indictment of Mr. His lawyers sent prosecutors a document warning that the lawyers knew of "unsavory conduct" of key witnesses and noted that "the government will rely on such witnesses at its peril In a highly visible, national case, such backgrounds will inevitably surface in some form.

He says he has become an ordained, nondenominational Christian preacher. Scrushy says his lawyers asked Judge Bowdre for a list of churches the jurors attend so he could avoid them. Then Mr. Scrushy's wife, Leslie, was called to the pulpit. In an interview, Ms. Scrushy says the embarrassment of the trial -- in which she says her husband has been unfairly dragged through the mud -- has made her no longer embarrassed to express her faith publicly.

She also says that she sometimes speaks in tongues, an ability many Pentecostals regard as a gift from the Holy Spirit. Scrushy took the pulpit. He preached for 47 minutes, swinging from booming Southern cadence to tear-choked whispers. Soon, at Bishop Hammock's direction, many in the congregation were laying hands on Mr. Scrushy's shoulders and praying for him. Bishop Hammock also thanked the couple for their message. They ask us all the time: 'He's guilty, isn't he?

Everything I've seen in their life is a display of innocence and a display of character and integrity in God. Scrushy, both white and black, gathered in the lobby of the federal courthouse here on Tuesday afternoon. Donald Wilder, who identified himself as a minister. Scrushy, accompanied by his wife, Leslie, who was clutching a small Bible.

Herman Henderson, who employs Audry Lewis at his Believers Temple Church and was among the black preachers supporting Scrushy who were present in the courtroom throughout. Now he said he knows they are both ''about the bucks. After Scrushy hired The Lewis Group, her stories moved from inside the newspaper to the front page.

The day jurors got the case, the Times featured a front-page piece by Audry Lewis saying ''pastors and community leaders have rallied around Scrushy showing him the support of the Christian and African American community.

Henderson said he was paid for his efforts to raise support for the defendant, but Scrushy said he had given money to the church because Henderson and Audry Lewis had asked for his help with a church building project. Scrushy Charitable Foundation in , the year pastors and leaders of those groups regularly attended Scrushy's fraud trial.

A separate trial in in Montgomery ended with Scrushy and former Gov. Don Siegelman being convicted bribery and conspiracy. The charitable donations, revealed in tax records recently made public, show that of the 25 organizations receiving donations, only three had no apparent connection with a church or religious organization.

He has gone from being the well-known leader of a major healthcare corporation to being the founder of his own church and the host of an early morning television Bible show seen in Birmingham and Montgomery. Pastors of churches that received money from the foundation have said their backing of Scrushy during the trial came out of support for a fellow Christian they felt was innocent of the charges, not due to donations from his foundation.

The donations in also went mostly to religious groups. Moore supported Scrushy during the trial and founded the Kingdom Builders religious organization with him. Moore has also been a regular guest on "Viewpoint," the religious television show hosted by Scrushy and his wife, Leslie. The Rev. Scrushy foundation gave most money to churches, religious groups The Montgomery Advertiser Associated Press January 2, The fraud charges reflect the many press reports on this site and I will not dwell on them in detail.

In essence they accuse Scrushy not only of being fully aware of the fraud but of being the driving force. They claim that he handed the accounting documents back to senior staff, when they did not meet analysts forecastes, telling them to fix them. He knew perfectly well what they were doing and discussed this with a small number of senior staff. The initial 85 charges were later consolidated into 58 including some new charges. Scrushy denied them all. The indictment, dated Oct.

HealthSouth executives talked of "filling the hole" or "filling the gap" when they made false entries in the company's books, the indictment says. Scrushy to review financial data showing that the company was exaggerating its earnings.

He "confronted" this person, the indictment says, ordering the executive not to try to tell him "how to run the company. The New York Times November 5, "If you take a complicated case to trial, many, many things can happen," he Alan Lieberman authority quoted admitted.

It's going to be very difficult to make all of them out to be liars. Perhaps the prosecution realised it was losing the battle for the jury's minds and that allegations describing complex accounting activities would go over their heads. It tried to counter the defences strategy. The superseding indictment returned this morning adds charges of obstruction of justice and perjury to charges previously filed against Scrushy and consolidates some of the other charges from the initial indictment, which included conspiracy, mail, wire and securities fraud, false statements, false certifications and money laundering.

While legal experts say it's a common tactic to introduce sensational new evidence late in a case, the government's Wednesday filing shows that prosecutors plan to present to jurors acts that are perhaps more easily understandable than complex accounting fraud, such as Scrushy's alleged use of HealthSouth landscapers at his personal properties.

The jury selected for the trial was predominantly black and this must have pleased Scrushy and his team. I don't think you can predict how this jury is going to go. Instead, it will try to show that other executives pulled off the conspiracy by purposely hiding it from Scrushy, HealthSouth's primary founder in Attorney for the northern district of Alabama told 12 jurors and six alternates in opening arguments before a packed federal courtroom.

It was the job of "the family" to inflate HealthSouth's quarterly numbers, he argued. In response to charges of mail and wire fraud, Parkman added, "It's not going to matter who licked a stamp or who faxed that letter.

He, Richard Scrushy, did not know, did not commit and did not participate in" the HealthSouth fraud. Was CEO 'very cunning' or 'lied to'? The challenge for the prosecution was to prove that Scrushy knew and there was no documentary evidence of this. While it was difficult to believe that he could not have known this was not proof that he did know.

It all depended on the testimony of HealthSouth staff, mostly convicted felons who were giving evidence in return for lenient sentences.

One defence witness claimed Owens had told him Scrushy did not know. The trial judge had to make several rulings about the case and several charges were thrown out or challenged. Judge Karon O. Scrushy's privacy by searching his HealthSouth office suite without a warrant. District judge in Birmingham, Ala. District Judge Karon Bowdre in Birmingham vacated a decision to drop three perjury charges against Scrushy and said the charges would be dropped "at the appropriate time.

Lawyers for Scrushy argue that the testimony by the CFOs and about two dozen other government witnesses proved no such link, and they asked Bowdre to dismiss all charges. Scrushy concerns a financial certification document he signed in August Because the financial data was fraudulent, the prosecution has argued, Mr. Scrushy violated Sarbanes-Oxley. The judge may not be finished dismissing charges against Mr. She has expressed skepticism concerning 10 counts of money laundering.

There were undoubtedly others out there who knew more but they had not been charged and when the defence tried to secure their co-operation they exercised their right to remain silent. Scrushy wanted to give evidence but the defence decided against this. They were doing well.

Scrushy has not personally explained to jurors the essence of his defense that he was duped by underlings, former executives who have pleaded guilty to fraud and testified against him. Instead, he has simply held the government to the test, compelling prosecutors to prove that he knew of wrongdoing rather than trying to explain away why he did not.

Deliberations resume Monday. The judge was criticised because of her inexperience and the fact that she had not wanted the case. She went to considerable lengths to ensure that Scrushy had a fair trial. The complexity of the case, the numerous legal disputes about the admissibility of evidence must have been confusing for the jury. Neither side asked U. District Judge Karon Bowdre to step aside, however, and Bowdre will continue presiding as closing arguments begin Wednesday.

Jury deliberations are set to start Thursday. District Judge Karon Bowdre said it wasn't her job to make sure prosecutors had an easy time during the trial, which began in January and ended Tuesday with jurors finding Scrushy not guilty on 36 counts.

I am committed to that. Amid long stretches of accounting minutiae, Judge Bowdre sometimes has cracked jokes or made self-effacing remarks that lessen the tension but that prosecutors worry could cause some jurors not to take the proceedings as seriously as they should. During questioning of one former chief financial officer, Weston Smith, a prosecutor got crossed up on some calculations.

Both sides stopped to total some figures. The defense's Mr. Parkman then exclaimed that he actually understood the math this time.

Parkman, and that is getting scary," the judge replied. Prosecutors also express frustration about the dozens of bench conferences the judge has permitted, during which the sides argue legal points out of the jury's hearing.

People familiar with the prosecution's thinking say some of its lawyers worry that Judge Bowdre's relative inexperience -- she has been on the bench since -- sometimes prevents her from ruling quickly. Still, in other cases, Judge Bowdre has developed a reputation for listening to both sides and preparing well for cases.

The judge declined to comment, citing the judicial code of ethics. The nature of the fraud was not disputed and there was no clear paper trail leading to Scrushy. The evidence of his involvement came from staff, most of whom were fellow conspirators who had pleaded guilty. It all came down to whether the jury believed them and considered that the evidence of these felons was proof beyond reasonable doubt.

This was a complex case involving accountants and business managers. Disruptive legal disputations were ongoing. It would not have been easy for the jury. The essence of the government's case is illustrated by the release of the statement by Bill Owens, used to secure the warrant for the raid on HealthSouth.

Acting on Scrushy's orders, Owens "helped devise various schemes to arbitrarily inflate the revenue figures," it said. Smith said he participated in meetings with a group called "the family" that helped inflate numbers after the true earnings were rejected by Scrushy, the statement said. With Smith wanting to quit the company for fear of prosecution, Scrushy told him "we're not going to play games any more" with HealthSouth finances, according to the statement.

Both declined to testify in a related civil hearing to seize Scrushy's assets last year. Magistrate Michael Putnam in Birmingham, Ala. His lawyers argued that the FBI's raid on HealthSouth's Birmingham headquarters to seize evidence in March lacked probable cause, according to court papers.

Aaron Beam had been with the company since its inception and had been its first CFO. He had pleaded guilty. To bolster the credibility of its witnesses the prosecutors needed to show that Scrushy was so involved in the day to day operation of the company that he could not have been unaware of what was happening as he claimed. The testimony of Aaron Beam, the firm's first chief financial officer, was aimed at bolstering the government's claim that Scrushy knew the company's earnings reports were being inflated to meet Wall Street expectations.

Beam helped Scrushy found the company in and retired in HealthSouth co-founder portrays former CEO as 'micromanager' when it came to company finances San Francisco Chronicle Associated Press January 26, Beam, who has pleaded guilty to bank fraud, traced the bogus accounting back to the second quarter of , when the company released its first earnings report with false numbers.

He said this was done with Scrushy's blessing. You guys are on your own. The former CFO said he was intimidated by Scrushy. Richard isn't the kind of person you cross," Beam told the court. Beam's testimony was punctuated by numerous objections from the defense team and Judge Karon Bowdre ordered the attorneys to the bench several times during the contentious session.

We're not making our numbers," Beam testified he told Scrushy. Beam recalled that Scrushy told him: "It is not an option to miss your numbers. Fix the numbers. On cross examination, Scrushy's lead defense attorney, James Parkman, tried to paint Beam as a liar whose testimony or memory could not be trusted. Beam appeared shaken and near tears at times, but he held his ground. Former CFO Says Scrushy Ordered Bogus Accounting Reuters January 26, Trying to damage Beam's credibility before a jury that includes several people who are active in churches, defense lawyer Jim Parkman got Beam to admit to owning two nightclubs, drinking and putting up a woman other than his wife in a home before he left HealthSouth, where he also got her a job.

Witness: HealthSouth Earnings Inflated Forbes Associated Press January 28, Then, during the cross-examination of former HealthSouth chief financial officer Aaron Beam Thursday, Parkman pulled off one of the most difficult tasks imaginable: He accused the government witness of being a lying, adulterous drunk, but did it - if this is possible - almost politely, in such a way that jurors wouldn't turn on him.

Beam confessed to having an affair but denied excessive use of alcohol. He was close to Scrushy and most of Scrushy's instructions were said to have been given through him.

His credibility was crucial as was corroboration of his evidence. Scrushy claimed Owens was the chief conspirator and had framed him. District Court in Birmingham, drawing a smirk and shake of the head from the defendant. Michael Martin, who later became a CFO, ended up joining the conspirators, while Leif Murphy, who was in the treasury department, left the company in August of Owens testified that the insiders were "astonished" by the accuracy of the detailing of the fraudulent numbers.

Owens said Martin had told him to destroy the book but that he instead held on to it and turned it over to the FBI in March of as the scandal was breaking. Owens said Scrushy was behind it from the start and received regular reports showing the company's true financial state was inadequate to meet Wall Street's income estimates.

Scrushy alone decided who became an officer and set salaries, Owens testified. They called it "dirt," a former executive of the company testified on Wednesday in federal court.

Owens, told jurors on Wednesday. Scrushy gave in to destroy revealing documents - the weekly reports with the actual performance numbers for all 50, rehabilitation, outpatient and sports hospitals. While the documents should have been shredded, the United States attorney's office, which is prosecuting the case, obtained some copies and has introduced them as evidence.

Scrushy was even in charge of the seating arrangements in the corporate dining room, Mr. Owens said. Scrushy talks about the time he spends on the weekends going over company reports. After refusing to talk with Scrushy over the matter, Smith agreed to speak with Owens, then the company's president. Owens, who pleaded guilty to the fraud and is testifying for the government, said Scrushy told him that "if we did not get Weston back to the reservation, it would be a problem".

HealthSouth founder 'offered bribe' Bloomberg February 8, At one point, in the fall of , Owens and other executives considered removing Scrushy as chairman but decided against it, testimony showed. Owens said the company was under "pressure" from the outside due to Scrushy's stock transactions, which had drawn shareholder lawsuits and a government probe.

The defense previously has portrayed the meeting at McVay's home as being part of a "coup" against Scrushy, who was then HealthSouth's board chairman. But Owens said the gathering did not result in any changes.

Scrushy should not be removed as chairman, and I expressed that," said Owens. Prosecutors showed the jury a copy of a later e-mail in which Scrushy chastised McVay for disloyalty.

The message to McVay read: "Cease making any negative comments about me and my leadership abilities to shareholders or analyst asap. I have received calls about your insubordination and I am taking this under consideration now. Richard scrushy. Scrushy how he got that information, and his response was, 'You don't want to know,' " Owens testified. Scrushy's comment to Owens on the tape about praying every day for God to allow them to hide the fraud is interesting in the light of his later religiosity.

Note the way in which the word fraud is never used. He added: "If you want to go public with all of this then you might as well get ready for. Get fired, it's all gone, everybody goes down.

And it's all done. In a phone call later the same day, Mr. Scrushy talked about his children. Owens, who has described Mr. Scrushy as the fraud leader. Owens' credibility was a key factor in this trial and the defence attacked it seeking to discredit him. The acknowledgement by William T. Owens that he misled Mr. Scrushy and other company directors about repaying the loan marked the first significant blow to his testimony.

The onetime HealthSouth finance chief has repeatedly told the jury that Mr. Scrushy's defense lawyers that Mr. Owens deceived his former boss about the fraud. Scrushy's legal team, pounced on the discrepancy. Owens responded: "On that one thing, yes. The exchange could poke holes in the credibility of the testimony of Mr. Owens, who continued yesterday to give steady, consistent responses in the face of the aggressive counterattack by Mr.

The defense lawyer wanted to show jurors that if Mr. Owens was willing to lie to Mr. Scrushy about the loan, then the former chief financial officer also would do whatever it took to cover up his responsibility for the accounting fraud at HealthSouth.

Parkman also characterized Mr. Owens as desperate for money and abusive of his power by using a company plane for personal trips that included golf outings. Owens acknowledged that he was delinquent in filing federal tax returns for approximately nine years, but insisted that he paid the "vast majority" of his overall taxes during that period.

Owens denied Mr. Parkman's assertions that the tax settlement he is hammering out with tax authorities depends on his testimony against Mr. Owens's confidence on the witness stand didn't waver, and at times his self-assurance during cross-examination approached an air of superiority. At one point, U. District Judge Karon Bowdre had to rein in Mr.

Owens, telling him: "Just answer the question you were asked, sir. Owens's poise under fire could create a risk for prosecutors if jurors interpret his courtroom demeanor as a sign that he was cunning enough to come up with the fraud and hide it from Mr.

Lief Murphy had uncovered the fraud in and after confronting Scrushy he resigned. Although he had signed a false document under pressure he had not been charged. He corroborated Owen's evidence and the defence would want to create uncertainty about his credibility.

His notebook written at the time was the only documentary proof linking this to Scrushy. Leif M.