Jurors unanimously acquitted deposed HealthSouth founder Richard Scrushy of conspiracy and all counts Tuesday in the Bush Justice Department’s attempt to put him away and take all his assets in what prosecutors called a $2.7 billion earnings overstatement at the rehabilitation and medical services chain.
The charge, with sweeping implications because it included allegations of fraud, false corporate reporting and making false statements to regulators, was the first in a 36-count indictment against Scrushy, the first CEO charged under the Sarbanes-Oxley corporate reporting law, the AP is reporting.
The court session continued as jurors announced their decision on the Sarbanes-Oxley charge and others against Scrushy, who blamed the massive accounting scheme on subordinates including all five finance chiefs who served under him at HealthSouth.
In all, 15 former HealthSouth executives have pleaded guilty since 2003, when the scandal erupted publicly and drove the company to the brink of bankruptcy.
Colorful defense attorney Jim Parkman from Dothan said he was not confident going into the trial against the federal government in the Hugo Black federal courthouse in downtown Birmingham.
“You would be a fool to go in confident,” he said. “Thank goodness it came out the way it did.”
Fox News is reporting that Scrushy “wiped away a tear” as the verdict was read, then hugged his wife and pastor.
At the same time the team of U.S. attorneys “looked stoically ahead.”
Mr. Scrushy walked out of the courthouse a free man at about 12:24 p.m. and thanked a lot of people, including “The Lord.”
He said he had alot to say, but not now. “There will be a time to talk. There are a long of wrongs that need to be made right,” he said. Donald Watkins said the credentialed press should meet the defense team at the Embassy Suites “in one hour.”
Losing U.S. Attorney Alice Martin walked out at 12:40 and said she was “disappointed.”
“We had to show he made a decision to do it (fix the numbers),” she said. “It was our job to present the evidence. We did. I’m shocked at the verdict.”
She said the case should have no impact on the effectiveness of the Sarbanes-Oxley corporate reporting law, which “will be tested again.”
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From the live press conference at the Embassy Suites:
Donald Watkins announced his retirement, saying a win on an 85 count indictment was a great way to go out.
Jim Parkman told a few stories too.
“I was concerned not to have a situation like the O.J. case, lawyers arguing amongst themselves,” he said. “We had a few, just family squabbles. We had a good plan and we stuck with it.”
He said he came to understand the negative feeling some people in Birmingham have of Mr. Scrushy, since he came with negative views himself, he said.
“You have to get to know a person before you cast doubts. It might change your opinion,” he said. “It changed mine.”
He said Scrushy was not a control freak. “He certainly didn’t control me,” he said.
He also took a shot at Paul Finebaum for calling him “a country hick and a bumpkin,” he said. “You just elevated me to a new plateau.”
More links:
Channel 13 News
ABC 33/40
The full AP story
