Richard Marin Scrushy (born August 1952) is an American businessman. He is the founder of HealthSouth Corporation, a global healthcare company based in Birmingham, Alabama. In 2004, following an investigation by the Federal Bureau of Investigation (FBI), Scrushy was criminally charged by the U.S. Securities and Exchange Commission (SEC). Scrushy was charged with 36 of the original 85 counts but was acquitted of all charges on June 28, 2005, after a jury trial in Birmingham.

Four months after his acquittal in Birmingham, on October 28, 2005, Scrushy was indicted by a federal grand jury in Montgomery, Alabama, along with former Alabama Governor Don Siegelman. The indictment included 30 counts of money laundering, extortion, obstruction of justice, racketeering, and bribery.

On May 7, 2009, Scrushy was transferred from the Texas jail where he had been incarcerated and placed in the custody of the Shelby County Jail in Columbiana, Alabama. Scrushy was returned to Alabama in order to testify in a new civil trial in the Jefferson County Circuit Court brought against him by shareholders of HealthSouth who sought damages related to Scrushy's trial and conviction. On June 18, 2009, Judge Allwin E. Horn ruled that Scrushy was responsible for HealthSouth's fraud, and ordered him to pay $2.87 billion. On July 25, 2012, Scrushy was released from federal custody.

Early life and background

Richard M. Scrushy was born in August 1952 in Selma, Alabama. At an early age, Scrushy taught himself to play the piano and guitar and was earning money doing odd jobs by the time he was twelve years old. After a run-in with a boss, Scrushy quit his job hauling cement and decided to return to school. After a year at Wallace State, Scrushy transferred to Jefferson State Community College and later entered the respiratory therapy program at the University of Alabama at Birmingham (UAB).

In early June 1997, Scrushy married Leslie Anne Jones in Jamaica, with guests such as Martha Stewart attending. The group met at the HealthSouth Hangar at the Birmingham International Airport and boarded a chartered Boeing 727 to Jamaica. Together Richard and Leslie have had three children. While working for Lifemark, Scrushy moved to St. Louis, Missouri, where he worked as the regional director of the respiratory therapy division. The new company opened its first facility in Little Rock, Arkansas, and had initial capital between $50,000-$70,000. With the assistance of four partners from Amcare Inc. and a one million dollar investment by Citicorp Venture Capital, Scrushy took the quickly growing company and founded HealthSouth Corporation in 1984. Roger Clemens; Jack Nicklaus, Michael Jordan; Shaquille O'Neal, HealthSouth facilities worldwide saw more than 120,000 patients daily, and with earnings around $106 million in 1997, Scrushy was the third-highest-paid CEO in the U.S.

Although HealthSouth grew tremendously throughout the 1990s, becoming the largest comprehensive rehabilitative services company in the U.S., Scrushy insisted that the change would not affect HealthSouth's bottom line but profits dropped by 93 percent by the end of the year. HealthSouth agreed to pay the United States government $325 million on December 30, 2004, in order to "settle allegations that the company defrauded Medicare and other federal healthcare programs".

Birmingham criminal trial

thumb|upright|United States of America v. Richard M. Scrushy, a 36-page indictment

On February 6, 2003, the Federal Bureau of Investigation (FBI) announced that it had begun a criminal investigation relating to the "trading of shares of the HealthSouth Corporation" and possible securities law violations. A criminal complaint was filed by the FBI against HealthSouth's chief financial officer, Weston Smith, and civil charges were brought against Scrushy by the SEC.

Scrushy's initial charges included 85 counts of conspiracy, money laundering, securities fraud, and mail fraud, but he was ultimately indicted with just 36 counts. In the indictment, Scrushy was accused of using intimidation, threats, and cash payments to coerce top HealthSouth executives into committing fraud. These top executives called themselves "The Family" and referred to their creative accounting as "filling the gap". began hosting a Christian television show with his wife called Viewpoint, backed a citywide 40-day prayer movement referred to as "City, thou art loosed", and joined the predominantly African-American Guiding Light Church. These actions were seen as an attempt to sway potential jurors, since 70 percent of Birmingham's population, and eleven of the eighteen jurors, were African American. Following more than a month of deliberations, Scrushy was acquitted of all charges on June 28, 2005. The probation officer suggested that Scrushy should be placed under house arrest and that he be required to wear an electronic monitoring device at all times.

On June 28, 2007, Scrushy was sentenced to six years and ten months in a federal prison, ordered to pay $267,000 in restitution to United Way of Alabama, three years' probation, and a fine of $150,000. Scrushy is also expected to personally pay for his time in prison and perform 500 hours of community service. Siegelman was sentenced on the same day to seven years and four months in prison, restitution of $181,325 to the state, three years' probation, a $50,000 fine, and 500 hours of community service upon his release. The restitution was based on debts accumulated by the State of Alabama during a fraudulent warehouse deal, but Siegelman was acquitted on charges related to the deal.

Appeal

Following the trial and conviction, Scrushy, Siegelman, and the prosecutors all indicated they would appeal. Scrushy and Siegelman vowed to appeal their convictions and sentences, while the prosecution announced its desire to appeal a judge's decision to remove charges of perjury from Scrushy's indictment. The 11th US Circuit Court of Appeals rejected Scrushy's request to be released on bond, citing an earlier ruling written by U.S. District Judge Mark Fuller. The ruling was issued while Scrushy was on bond awaiting sentencing, and deemed him a flight risk.

In March 2009, a panel of three judges from the 11th U.S. Circuit Court upheld all charges against Scrushy and dismissed two of the seven charges against Siegelman. A further appeal for a full court review of the case was also denied by the 11th U.S. Circuit Court of Appeals on May 15, 2009. On June 4, 2012, the Supreme Court rejected Scrushy's appeal, allowing his public corruption and bribery convictions to stand.

Birmingham civil trial

Scrushy was returned to Alabama on May 7, 2009, in order to testify in a new civil trial in a Birmingham court. While opposing counsel claimed Scrushy was a "hands-on manager who treated the company as a personal piggy bank," he continued to assign blame to his subordinates and maintain that he did nothing wrong. On June 18, 2009, Judge Horn ordered Scrushy to pay $2.87 billion in damages. Judge Horn stated, "Scrushy knew of and actively participated in the fraud" and referred to Scrushy as the "CEO of the fraud". Scrushy appealed the judgment to the Alabama Supreme Court. On January 28, 2011, Scrushy lost his appeal of the civil verdict.

Release

According to the Federal Bureau of Prisons website, the 59-year-old Scrushy was moved in April 2012 from the federal prison in Beaumont, Texas into the supervision of the community corrections management field office in San Antonio. Following his move to a halfway house, Scrushy was moved to home confinement, and then, on July 25, 2012, was released from federal custody.