Scrushy ordered to pay HealthSouth shareholders for alleged fraud

NEWS IN BRIEF — Posted June 29, 2009

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Former HealthSouth CEO Richard Scrushy, the company's founder, has been ordered by an Alabama judge to pay almost $2.9 billion to shareholders because of his liability in an accounting fraud scandal.

Jefferson County Circuit Judge Allwin E. Horn heard testimony from five former financial officers from HealthSouth who testified against their former boss for inflating earnings by $2.7 billion between 1996 and 2002.

Scrushy, who testified publicly for the first time concerning the alleged fraud, denied all wrongdoing. If the verdict stands up on appeal, about half of any money collected from that $2.9 billion would go to HealthSouth itself.

Scrushy was acquitted of federal charges, though several of his company's chief financial officers pleaded guilty or were convicted.

Scrushy is serving time in Texas on bribery charges on an unrelated case. Scrushy was charged with arranging $500,000 in contributions to then-Gov. Don Siegelman's campaign for a state lottery in exchange for an appointment to a state hospital regulatory board. He was sentenced to six years and 10 months in prison. Siegelman was also convicted in the scheme and was sentenced to seven years. Both men appealed their convictions.

Note: This item originally appeared at

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