Another ex-CFO takes stand against Scrushy

BIRMINGHAM, Ala. -- A former HealthSouth Corp. finance chief yesterday described ousted chief executive Richard Scrushy as a corporate bully who persuaded him to sign false financial statements.

Weston Smith, the fifth and final former HealthSouth chief financial officer to take the stand against Scrushy at his corporate fraud trial, said he planned to quit HealthSouth rather than sign bogus financial statements in 2002 because he was worried about the new Sarbanes-Oxley law, which included long prison terms for corporate fraud.

But Smith said Scrushy persuaded him to sign the statements by telling him about plans to end the fraud, lower earnings expectations, and split HealthSouth into two companies.

''His analogy was that we all rode in together in this pickup truck and we were all going to ride out on it," said Smith, testifying under a plea deal.

Describing an atmosphere of intimidation at HealthSouth, Smith said Scrushy would ''humiliate" subordinates who challenged him during meetings.

Smith said Scrushy was part of what prosecutors have described as a conspiracy to overstate HealthSouth earnings by some $2.7 billion for seven years beginning in 1996.

Smith was the first of 15 HealthSouth executives to plead guilty in March 2003. He hasn't been sentenced but faces almost $7 million in fines and forfeitures and could be sentenced to at least 10 years in prison.