Even if Richard Scrushy is found not guilty of fraud charges, he could still serve jail time-thanks to new government allegations contained in a superseding indictment filed last week.
Scrushy, founder and former chief executive officer of HealthSouth Corp., Birmingham, Ala., pleaded not guilty in U.S. District Court in Birmingham. The new indictment adds charges of perjury and obstruction of justice, which stem from a Securities and Exchange Commission investigation into the company's finances. The government consolidated the charges against Scrushy, bringing the overall number down to 58 from 85, and put the fraud dollar amount at $2.6 billion.
The indictment alleges Scrushy lied during testimony when he said he never knowingly signed false or inaccurate filings for the SEC and that he attempted to persuade at least one former HealthSouth executive, former Chief Financial Officer William Owens, "to give materially false and misleading testimony." If found guilty, those charges alone could put Scrushy in jail for up to 20 years; in all, he's facing a maximum sentence of 450 years and $30 million in fines, the government said.
Scrushy's legal team said the government broke grand jury secrecy rules when it sent out a news release about the new indictment before the arraignment. It said it would take that matter to court and also attempt to lower Scrushy's $10 million bond-because of the dropped charges-this week.
A news release sent out by the Scrushy team said the fraud was perpetrated by Owens.
The added charges aren't good for Scrushy, but the dropping of some charges will help him, said William Maruca, chairman of the fraud and abuse division of the American Health Lawyers Association. Scrushy's trial is set for January 2005.