2 Ex-HealthSouth Execs Acquitted

A federal jury in Alabama on Friday acquitted two former HealthSouth Corp. executives accused in what the government described as a bribery scheme involving a $50-million deal to run a hospital linked to Saudi Arabia’s royal family.

Jurors found Robert Thomson and James Reilly not guilty in a case that grew out of a much larger investigation into accounting fraud at the medical services chain. The verdict is the first in a criminal trial resulting from the HealthSouth probe.

In the same courthouse, another jury continued deliberating charges against former CEO Richard Scrushy, accused of directing the $2.7-billion fraud.

Prosecutors claimed that Thomson and Reilly agreed to pay kickbacks of $500,000 annually for five years in return for HealthSouth receiving a contract to manage a hospital funded by a foundation tied to Saudi royalty.

But jurors sided with the defense, which argued that the money was paid under a legitimate consulting agreement.