Richard Scrushy
American businessman
- Entries
- 9
- On the record
- 7
- Stories
- 1
- Latest entry
- Jun 29, 2010
The record
Richard Scrushy was a founder, chairman and chief executive of HealthSouth Corp., which the Justice Department described in 2003 as the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitative services, with about 1,800 locations. On March 19, 2003, the SEC charged the company and Scrushy with overstating earnings by at least $1.4 billion, and trading in HealthSouth stock was suspended for two business days.
His record splits into two criminal cases with opposite outcomes. An 85-count federal indictment in Birmingham, unsealed in November 2003, ended in his acquittal in 2005. A separate bribery case in Montgomery, tried alongside former Alabama Governor Don Siegelman, ended on June 29, 2006, with his conviction on all six counts against him, and a sentence of nearly seven years.
In April 2007 he settled the SEC's civil case for $81 million without admitting or denying its allegations, and accepted a permanent bar from serving as an officer or director of a public company. In June 2010 the U.S. Supreme Court vacated the appeals court decision upholding the bribery convictions and sent the case back for review in light of its honest-services ruling in the Skilling case.
Roles and honours on the record
Every entry, newest first
- Reported
Biography.com reports he was ordered to pay about $2.9 billion to HealthSouth shareholders in a civil suit. Biggest founder frauds ranked: Madoff tops, $170B forfeiture
- Ruled
Acquitted on 36 counts of fraud at HealthSouth, per Biography.com. Biggest founder frauds ranked: Madoff tops, $170B forfeiture
Stories in this file
The record, entry by entry
- 2003-03-19 Filed The SEC charged HealthSouth and Scrushy in federal court in Birmingham, alleging that since 1999, at his insistence, the company overstated earnings by at least $1.4 billion and assets by at least $800 million. A separate SEC order suspended trading in HealthSouth securities for two business days. SEC press release 2003-34
- 2003-11-04 Filed An 85-count federal indictment charging Scrushy with conspiracy, mail, wire and securities fraud, false statements, false certifications and money laundering was unsealed in Birmingham. Prosecutors sought forfeiture of more than $278.7 million in property. U.S. Department of Justice press release
- 2004-12-30 Official HealthSouth agreed to pay the United States $325 million to settle allegations that it defrauded Medicare and other federal health programs through its outpatient physical therapy and inpatient rehabilitation businesses. U.S. Department of Justice press release
- 2005 Ruled Scrushy was acquitted on the criminal fraud charges arising from the HealthSouth accounting case. NBC News report
- 2006-06-29 Ruled A federal jury in Montgomery convicted Scrushy on all six counts against him: one count of bribery, one of conspiracy to commit honest services mail fraud and four of honest services mail fraud. Former Governor Don Siegelman was convicted on seven of 33 counts. U.S. Department of Justice press release
- 2007-04-23 Ruled The federal court in Birmingham entered a final judgment ordering Scrushy to pay $81 million, $3.5 million in civil penalties and $77.5 million in disgorgement, and permanently barring him from serving as an officer or director of a public company. He consented without admitting or denying the SEC's allegations of a $2.6 billion fraud. SEC Litigation Release No. 20084
- 2010-06-29 Ruled The U.S. Supreme Court vacated the 11th Circuit decision that had upheld the convictions of Scrushy and Siegelman and sent the appeals back for review in light of its Skilling ruling on honest-services fraud. NBC News report
Documents
- SEC press release 2003-34, charges against HealthSouth and Scrushy (Mar. 19, 2003)
- SEC complaint, SEC v. HealthSouth Corp. and Richard M. Scrushy
- SEC Litigation Release No. 20084, $81 million final judgment (Apr. 23, 2007)
- DOJ release on the 85-count indictment (Nov. 4, 2003)
- DOJ release on the Montgomery bribery verdict (June 29, 2006)