A state judge in Birmingham, Ala., ordered fired HealthSouth CEO Richard Scrushy to pay the company $2.88 billion in a shareholder lawsuit blaming him for massive accounting fraud at the rehabilitation company.
The judgment is the result of an 11-day trial presided over by Jefferson County Circuit Court Judge Allwin Horn in May. Scrushy took the stand for three days to argue that he played no role and was unaware of widespread financial deception. Scrushy was acquitted of criminal fraud charges but is serving a prison sentence in Beaumont, Texas, on a federal bribery conviction. The judgment amount reflects excess debt costs that the company shouldered as a result of the fraud, excess salaries and bonuses, taxes paid on fictitious earnings and the cost of reconstructing several years of cooked books that dramatically exaggerated company earnings in order to drive up its stock value.