Business
Prosecutors won't appeal Scrushy ruling
■ That officially ends the former HealthSouth chief's criminal cases related to an accounting scandal. Meanwhile, Scrushy says he will prevail in civil lawsuits.
By Katherine Vogt — Posted Aug. 1, 2005
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Nearly two weeks after Richard M. Scrushy's acquittal on 36 charges related to a massive accounting scandal at the outpatient services giant, U.S. Attorney Alice H. Martin announced that she was dropping her appeal of three perjury counts against the HealthSouth founder that a lower court had dismissed.
Martin, based in Birmingham, Ala., declined to comment beyond a one-sentence statement saying the action was "based on legal considerations." A representative in her office said the move effectively resolved all criminal charges against Scrushy.
Prosecutors had alleged that the ousted CEO was the mastermind behind a $2.7 billion accounting scandal at HealthSouth in which earnings were fraudulently inflated to boost the company's stock price. Eighteen other former executives faced criminal charges in the scheme. A jury cleared Scrushy of wrongdoing on June 28 after a five-month trial.
Scrushy thanked supporters in a letter dated July 15 on his Web site (link). He also, as he did before the criminal trial, proclaimed his innocence.
"The simple truth is and always has been this: I had no knowledge of any fraud at HealthSouth. A jury of my peers found me not guilty on all counts, and for this, I am humbly grateful," he said.
Scrushy said watching the Birmingham-based company he founded 20 years ago flounder in the wake of the scandal was heartbreaking. "However, what pains me the most, is how our United States government conducted this investigation in a way that maximized the damage done to HealthSouth and to its shareholders," he said.
In the wake of the scandal, HealthSouth underwent a major upheaval and veered toward financial ruin. It has since undergone a management overhaul, posted charges and restatements related to the fraud, and improved its financial outlook.
Scrushy still faces civil lawsuits from the Securities and Exchange Commission as well as from scores of shareholders.
On his Web site, Scrushy said he and his attorneys were confident they would prevail again.
