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Scrushy fraud case goes to jury today

Defense blames his subordinates

BIRMINGHAM, Ala. -- Richard Scrushy, fired as HealthSouth Corp.'s chief executive, was an overbearing ''pied piper" who led underlings into a $2.7 billion accounting fraud so he could get fabulously rich, prosecutors told jurors yesterday. But the defense countered in closing arguments that Scrushy was betrayed by subordinates, and not a single piece of evidence clearly linked him to a crime. Scrushy lawyer Jim Parkman even called a main prosecution witness ''a big rat."

US Attorney Alice Martin, calling Scrushy a ''financial genius" and ''master manipulator," said all the evidence pointed toward Scrushy's directing the massive earnings overstatement, which took the rehabilitation and medical chain to the edge of bankruptcy.

Scrushy made hundreds of millions of dollars off bonuses and stock options simply by signing financial reports containing billions of dollars in false numbers, she said.

The defense disagreed, claiming subordinates pulled off the accounting scheme and hid it from Scrushy for years. The government ''completely botched" the HealthSouth investigation, said Scrushy attorney Art Leach.

Scrushy, HealthSouth's primary founder in 1984, already had $175 million in assets before the fraud began, Leach told jurors as he argued that the crime couldn't have paid well enough for him to get involved in fraud.

Jury deliberations will begin today in a trial that started Jan. 25.

Scrushy is the first chief executive accused of violating the Sarbanes-Oxley act, passed three years ago in response to corporate scandals. He also is accused of conspiracy, false reporting to the Securities and Exchange Commission, multiple fraud counts, and money laundering.

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