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Grand Jury Adds to HealthSouth Charges

By Carrie Johnson
Washington Post Staff Writer
Thursday, September 30, 2004; Page E03

Federal prosecutors yesterday announced new perjury and obstruction-of-justice charges against HealthSouth Corp. founder Richard M. Scrushy, accusing the former chief executive of the rehabilitation hospital chain of lying to regulators and urging a subordinate to lie to support his story.

U.S. Attorney Alice H. Martin in Birmingham said a federal grand jury amended a November 2003 indictment of Scrushy, adding four charges and trimming the total number of conspiracy, mail fraud, and securities fraud counts against him from 85 to 58.


Richard M. Scrushy, left, and his lawyer, Jim Parkman, in Birmingham yesterday. New charges against Scrushy were announced. (Bernard Troncale -- Birmingham News Via AP)

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Scrushy, 52, is accused of leading a conspiracy to manipulate company earnings by more than $2.6 billion before his ouster last year.

Scrushy told U.S. Magistrate Judge T. Michael Putnam yesterday that he was "absolutely not guilty." He has blamed a small group of subordinates for hatching the fraud and hiding it from him. Seventeen people have pleaded guilty in connection with the HealthSouth investigation.

The new charges against Scrushy relate to sworn testimony he provided to Securities and Exchange Commission officials in March 2003. Prosecutors contend that Scrushy lied in the interview about the accuracy of financial statements he signed. The government also claims that after the interview, Scrushy attempted to "corruptly persuade" one of his subordinates to lie to the SEC.

"We are ready for this case to go to trial," Jim Parkman, a lawyer for Scrushy, said in a prepared statement.

Scrushy's trial is scheduled for January in Birmingham.


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