Judge Instructs Jurors in Scrushy Trial
The judge overseeing the accounting fraud trial of HealthSouth Corp. founder Richard Scrushy told jurors how to apply the law to 36 criminal counts and urged them to ignore the defendant’s decision to forgo testifying.
U.S. District Judge Karon Bowdre instructed jurors on such legal concepts as “reasonable doubt,” when weighing whether Scrushy directed a conspiracy to inflate profit by $2.7 billion from 1996 to 2002, as prosecutors allege. Jurors will hear closing arguments today and begin deliberating Thursday.
Scrushy, who was fired as chief executive of HealthSouth, blames the fraud on five former finance chiefs who pleaded guilty and testified against him. Scrushy is the first CEO accused of violating the Sarbanes-Oxley corporate governance law. Bowdre said Scrushy had a constitutional right to remain mum.
“You cannot consider Mr. Scrushy’s decision not to testify in any way during your deliberations,” Bowdre told a panel of 16 jurors in Birmingham, Ala. She said jurors also must not be swayed by Scrushy’s race, religion, wealth or lifestyle.
Scrushy is accused of conspiracy, securities fraud, wire fraud, mail fraud, money laundering, making false statements to investors and certifying a false financial statement in violation of Sarbanes-Oxley. If convicted, he faces dozens of years in prison, and jurors will separately consider 12 counts seeking forfeiture of $279 million in assets.
Prosecutors say Scrushy inflated shares at HealthSouth, the largest U.S. operator of rehabilitation hospitals, to meet the expectations of Wall Street analysts.
Scrushy denies any wrongdoing and predicted Tuesday that he would be acquitted.
During the trial, Bowdre dismissed 10 of the 58 counts in a superseding indictment of Scrushy. He was originally accused of 85 counts in an initial indictment unsealed in November 2003.
It was also revealed Tuesday that Bowdre, during a closed hearing in 2003, considered removing herself from the case because she had a personal relationship with one of Scrushy’s daughters, and she once rode show horses at a stable on his property. Bowdre unsealed the transcript late Monday after the Birmingham News inquired about the hearing.
Bowdre, a former law professor appointed to the federal bench by President Bush in 2001, said during the meeting that she was “somewhat of a neophyte to criminal law.” She told lawyers they could ask her to step down from the case if they desired. They did not.
Outside the courthouse, Scrushy said his relationship with the judge had no effect on the trial.
“It’s real clear that there’s no advantage to either side,” Scrushy said. “She’s been a wonderful judge. She should have been harder on the government.”
