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Perjury, obstruction charges in revised HealthSouth indictment

By JAY REEVES
The Associated Press

Richard Scrushy is the fired CEO of HealthSouth.

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BIRMINGHAM, Ala. — Federal prosecutors added perjury and obstruction-of-justice charges to the criminal case against fired HealthSouth Chief Executive Richard Scrushy yesterday under a new indictment in the rehabilitation giant's accounting scandal.

The new charges, part of a superseding indictment, were announced by the Justice Department as it consolidated conspiracy and fraud charges while trimming the total number of counts from 85 to 58.

Scrushy, 52, told U.S. Magistrate Judge T. Michael Putnam during a brief arraignment that he was "absolutely not guilty." Outside court, defense lawyer Jim Parkman described the reduction in counts as a victory.

"What a great day it is for Richard Scrushy," said Parkman, who plans to seek a reduction in Scrushy's $10 million bond since he is now named on fewer counts.

Scrushy spokesman Charlie Russell said defense attorneys had expected a new indictment, which he said was issued to conform with a Supreme Court ruling that requires prosecutors to spell out any allegations that they intend to use in a possible sentencing hearing.

Scrushy previously pleaded not guilty to charges accusing him of conspiracy, securities fraud and money laundering, among other crimes. Free on $10 million bond, he contends a $2.6 billion accounting fraud at HealthSouth was committed by others without his knowledge.

A federal judge has scheduled jury selection in his trial to begin Jan. 5. Besides a lengthy prison sentence, prosecutors are seeking $278 million in assets they contend Scrushy made off the fraud.

Outside court, Scrushy thanked HealthSouth employees he said have contacted him with expressions of support. "We're looking to put this behind us," said Scrushy, accompanied by his wife, Leslie.

The new charges accuse Scrushy of three counts of perjury and one of obstruction of justice arising from the Securities and Exchange Commission's probe of HealthSouth finances. The Justice Department accused Scrushy of lying to an SEC officer when he claimed figures in a 2001 HealthSouth financial report that he signed were accurate and that he had not instructed anyone to change numbers.
 
The obstruction-of-justice charge alleges that around March 17, 2003, after Scrushy testified before the SEC, he met with other HealthSouth officers and co-conspirators and advised them of the investigation and his answers to examiners' questions, the Justice Department said.

The indictment alleges that Scrushy "attempted to corruptly persuade one of the co-conspirators in order to influence his testimony" in the SEC proceeding, the Justice Department said. Another Scrushy lawyer, Donald Watkins, said the allegations were "nothing new" and based on evidence the government has had for months.

Scrushy and 19 more former HealthSouth officers and employees have been charged in the federal investigation, with 17 pleading guilty and agreeing to cooperate with prosecutors.