Business

Judge drops some Scrushy charges

NEWS IN BRIEF — Posted Dec. 19, 2005

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A federal judge on Nov. 29 dismissed two of the Securities and Exchange Commission's civil fraud charges against ousted HealthSouth leader Richard M. Scrushy, saying the factual allegations were vague.

However, U.S. District Judge Inge P. Johnson in Birmingham, Ala., told the SEC it could refile those charges by Dec. 30. She also allowed four other fraud charges to remain active in the agency's lawsuit against the former chief. The SEC is seeking to make Scrushy pay civil penalties and forfeit "ill-gotten gains" related to a $2.6 billion accounting fraud scandal at HealthSouth.

Johnson on Dec. 1 set April 2, 2007, as the opening date for the civil trial.

Scrushy was acquitted of criminal wrongdoing in the accounting scandal after a lengthy jury trial that ended last summer. He also has denied all of the SEC's charges.

At least 18 former HealthSouth executives have been charged in the plot; many have pleaded guilty. HealthSouth itself has paid the SEC $100 million to settle fraud charges.

Note: This item originally appeared at http://www.ama-assn.org/amednews/2005/12/19/bibf1219.htm.

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