Business

HEALTHSOUTH EX-CEO LOSES $2.9B CIVIL CASE

HealthSouth Corp. founder Richard Scrushy, acquitted in 2005 on criminal charges of directing an accounting fraud, was found liable for $2.9 billion in a civil trial in Birmingham, Ala.

“Scrushy knew of and actively participated in the fraud,” state court Judge Allwin E. Horn said in his ruling. After a two-week trial, Horn ruled in favor of investors who brought the suit on behalf of the company.

“Scrushy was the CEO of the fraud,” Horn said in his ruling. The judge decided the case without a jury.

Scrushy, 56, testified that only a “bungling idiot” would have contemplated taking the company private, as he was, knowing a fraud might be discovered.

The investors’ lead attorney, John W. Haley, said in a statement that the ruling “is a shot across the bow for those who engage in corporate greed and fraud in our country.”

Scrushy’s attorney, Jim Parkman, was unavailable.

Horn heard from former CFOs, all of whom pleaded guilty to their roles in the accounting fraud and testified against Scrushy. Scrushy defended his actions in open court for the first time since the FBI raided HealthSouth offices in 2003.

A jury acquitted him in June 2005 of criminal charges that he ran an accounting fraud at HealthSouth.