Ex-executive: Scrushy told staff to 'fix the numbers'

BIRMINGHAM, Ala. -- Fired HealthSouth chief executive Richard Scrushy told his staff to ''fix the numbers" to conceal a potential earnings shortfall in mid-1996 when a massive accounting scandal was just beginning, the company's first chief financial officer testified yesterday.

Aaron Beam, one of 15 former HealthSouth executives who reached plea deals and are expected to testify for the government in Scrushy's corporate fraud trial, described Scrushy as being at the heart of the fraud for which he is on trial.

Beam said he participated in the fraud for a year because Scrushy intimidated him.

''He said, 'If we are ever caught I am going to deny everything and you guys are on your own,' " said Beam, adding later: ''Richard is just not the kind of person you cross."

Beam came under sharp questioning from defense attorney Jim Parkman, who got him to admit to repeatedly lying to investors, auditors, analysts, and directors during the scheme while being unable to remember dates and other basic facts on the stand.

''Did it just get to be so much lying you can't separate the lies from the truth?" Parkman asked.

''No," Beam answered quietly.

While prosecutors and the defense agree there was a massive scheme to overstate earnings, Scrushy contends Beam was part of a group of overly ambitious, greedy subordinates who hid it from him through years of lies.

Scrushy's lawyers argued in opening statements that Beam was part of a group of close-knit HealthSouth executives who called themselves ''the family."

That group was behind the fraud and kept Scrushy in the dark for years, the defense contends.