HealthSouth Corp. founder Richard Scrushy filed a formal complaint last week with the U.S. Justice Department's Office of Professional Responsibility, accusing federal prosecutors of misconduct in the government investigation of accounting fraud at HealthSouth that led to sweeping charges against Scrushy.
The complaint accuses U.S. Attorney Alice Martin in Birmingham, Ala.; Richard Smith, deputy chief of the Justice Department's fraud section; and FBI agent Gerry Kelly of concealing evidence of Scrushy's innocence, including secret tape-recordings that contradict prosecutors' statements in court. The admissibility of the recordings in court has been the subject of a heated debate in recent months. The tapes were made without Scrushy's knowledge in March 2003 by then-Chief Financial Officer William Owens.
According to Scrushy's complaint, interview documents show that Owens told the FBI that only employees within the finance department had direct knowledge of the fraud. "Contrary to the government's claims, it knew at that time that its secret tape-recordings of Mr. Scrushy show that Mr. Scrushy told Owens not to promise any more to Wall Street than they could deliver," the complaint said.
Martin did not return calls seeking comment last week.
Meanwhile, HealthSouth late last week said the Circuit Court of Jefferson County, Ala., granted the rehabilitation provider's request for a temporary restraining order to prevent certain debtors from accelerating the amounts the company owes them. HealthSouth said without a restraining order, pressing debtors "would cause substantial harm to its enterprise value and all of its stakeholders."