Corporate Compliance

HealthSouth founder’s trial begins in Birmingham

Compliance Monitor, January 26, 2005

The trial of Richard Scrushy, founder and former chief executive officer of Birmingham, AL-based HealthSouth, began January 24 with prosecutors charging that he conspired to inflate the rehab provider's earnings by more than $2.6 billion, the Associated Press (AP) reports.

Two years after Scrushy's firing, a jury was seated January 24 to hear Scrushy answer to a 58-count indictment that includes charges of fraud, conspiracy, obstruction of justice, perjury, money laundering, and false corporate reporting, which is the first test of the 2002 Sarbanes-Oxley Act, the AP reports. The prosecution alleges that Scrushy hurt the company while making himself wealthy by filing false financial reports from 1996 to 2002.

Prosecutors are seeking $278 million worth of Scrushy's personal assets--including waterfront property, luxury cars, and a yacht--to offset the financial losses he is alleged to have caused. If convicted, Scrushy could also face up to life in prison , the AP reports.

Most Popular