Scrushy Denies Role In HealthSouth Fraud

Scrushy portrayed himself as a victim of the fraud right up to an FBI raid in early 2003 on the company's headquarters in suburban Birmingham.

Recounting plans around that time to take HealthSouth private with a leveraged buyout, Scrushy testified that two former finance executives who pleaded guilty, Tadd McVay and Bill Owens, repeatedly assured him that HealthSouth had at least $300 million in cash for the deal.

"At no time ever did they pull me aside or anybody and say, 'We don't have that cash,'" said Scrushy, his voice rising.

Scrushy's testimony contradicted prosecution claims from his criminal trial, during which former executives who pleaded guilty said Scrushy knew about the scheme.

In the civil suit, plaintiff's witnesses have said HealthSouth killed a merger with nursing home operator Manorcare in 1999 because the fraud would have been revealed. But Scrushy testified that HealthSouth canceled the deal because it wasn't sure it wanted to be in the nursing home business and a board member objected.

Scrushy also said he was responsible for locking up the company's shredding machines to guard against the destruction of documents after an outside law firm was brought in to review HealthSouth's finances amid separate accusations of insider trading in 2002. He said he favored the establishment of a toll-free hotline for employees to report fraud.