Scrushy Denies Role In HealthSouth Fraud

JAY REEVES

BIRMINGHAM, Ala. (AP) — Testifying publicly for the first time about the financial debacle at HealthSouth Corp., fired CEO Richard Scrushy denied any involvement Wednesday with the huge accounting swindle that engulfed the rehabilitation company.

On the witness stand in a lawsuit filed by shareholders seeking $2.6 billion from Scrushy on behalf of HealthSouth, the longtime chief executive repeatedly portrayed himself as being unaware of an accounting fraud that evidence showed lasted for six years, starting in 1996.

Scrushy said he didn't know the company had cooked its books until 2003, when an FBI raid and government lawsuit revealed the scheme.

"I had no knowledge of any financial fraud at HealthSouth," said Scrushy, temporarily out of the federal prison where he is serving time for a separate corruption conviction.

Scrushy said he wasn't aware of some financial details at the company, including a $350 million budgeting error that his attorney depicted as a mistake, not fraud.

As Scrushy looked through old financial statements where he had circled numbers years before that didn't add up, defense lawyer Jim Parkman asked why he would raise such questions if he were in on the scam.