HealthSouth Boss on Hook for $2.9B Fraud

Civil case finds Scrushy to blame after criminal acquittal

By Matt Cantor,  Newser Staff

Posted Jun 18, 2009 1:57 PM CDT

(Newser) – Four years after Richard Scrushy was acquitted of directing accounting fraud at HealthSouth, a judge has held him accountable for $2.876 billion, Bloomberg reports. “Scrushy was the CEO of the fraud,” said the judge, who ruled without a jury. The decision “is a shot across the bow for those who engage in corporate greed and fraud in our country,” said an attorney for the plaintiffs.

Shareholders suing Scrushy held that the hospital chain's founder had spent the firm’s cash on real estate, 400 flights to his lake house in a HealthSouth helicopter, and breast implants for a member of a band he put together. His lawyers said he advanced money to the company for expenses, the helicopter use was in his contract, and the band member needed emergency implants because her current ones had made her sick.

In 2005, Richard Scrushy, second from left, with his wife Leslie and attorneys, meets with reporters outside the Hugo Black Federal Courthouse in Birmingham, Ala.   (AP Photo)
In this 2007 file photo, former HealthSouth CEO Richard Scrushy leaves federal court.   (AP Photo)
This undated file photograph released by the Shelby County, Ala., Sheriff's Department shows former HealthSouth Corp. CEO Richard Scrushy.   (AP Photo)
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