- The Washington Times - Sunday, June 12, 2005

BIRMINGHAM, Ala. (AP) — When it comes to celebrity trials, Richard Scrushy is no Michael Jackson or Martha Stewart. The flashy HealthSouth Corp. founder has star power in Alabama, but not many other places.

So why try Mr. Scrushy on corporate fraud charges in his longtime home of Birmingham, where a jury could be swayed by his carefully constructed reputation as a generous but hard-charging business leader?

With jurors reporting a deadlock after 12 days of deliberations in the trial of the fired HealthSouth chief executive, some are second-guessing the government’s decision to try Mr. Scrushy in the city where he built HealthSouth into a leader in the rehabilitation and medical services industry.

Pulling from a largely hometown jury pool, Mr. Scrushy’s attorneys bested prosecutors while picking jurors and got a panel that has at least some members who are sympathetic to the millionaire businessman, said Joel Androphy, a Houston lawyer who specializes in white-collar crime.

“Lawyers are learning more and more that what matters isn’t who is the better cross-examiner, it’s who’s sitting there listening to your case,” Mr. Androphy said. “It was over in jury selection.”

Former prosecutor Don Cochran said federal law gives prosecutors wide latitude in deciding where to try defendants in cases such as the one against Mr. Scrushy, who could have been indicted in New York, Atlanta, Washington or anywhere else HealthSouth sent financial reports that included bogus numbers.

“But I think this was viewed as a Birmingham case from the outset,” said Mr. Cochran, who teaches law at Samford University, a few miles from the courthouse where Mr. Scrushy is on trial.

Mr. Scrushy is accused of directing a $2.7 billion earnings overstatement over seven years at HealthSouth. Prosecutors say he made millions of dollars on bonuses and stock sales while the fraud made it appear the company was meeting Wall Street projections.

The defense blames the scheme on Mr. Scrushy’s underlings.

Jurors are scheduled to begin their 13th day of deliberations today after a four-day weekend.

Prosecutors repeatedly have defended the decision to indict Mr. Scrushy in Birmingham, saying the location was appropriate because HealthSouth grew into an industry leader in the city and many of the reputed crimes were committed at the company’s sprawling suburban campus.

Also, the 15 former HealthSouth executives who pleaded guilty in the fraud all admitted to crimes committed in the metro area.

But prosecutors’ decision to indict and try the former CEO in Birmingham may have played into the hands of Mr. Scrushy, whose name is on buildings throughout the area after years of philanthropic donations.

Besides the fact that some jurors may drive on or past Richard M. Scrushy Parkway after a day in court, Mr. Scrushy also has a daily Bible show on cable television, and his son-in-law is the majority owner of a TV station that airs a daily trial wrap-up that is often sympathetic to the defense.

Unless jurors break their deadlock, U.S. District Judge Karon Bowdre could be forced to declare a mistrial, a move that would force prosecutors to decide whether to try Mr. Scrushy again, and how.

Mr. Cochran said prosecutors could ask a judge to move any retrial of Mr. Scrushy to a different city, or they could try to have him indicted outside Birmingham.

“Certainly you could go to Manhattan because of the New York Stock Exchange,” he said.

But neither Mr. Cochran nor Mr. Androphy expect the case to be moved from Birmingham should jurors deadlock. The defense likely would oppose any change of venue motion, Mr. Androphy said, and prosecutors could be accused of “forum shopping” were Mr. Scrushy indicted elsewhere.

“They are stuck in Birmingham,” Mr. Androphy said. “They wanted it there, and it’s there.”


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