- The Washington Times - Wednesday, June 22, 2005

BIRMINGHAM, Ala. (AP) — A federal judge ordered a revamped jury in Richard Scrushy’s trial to begin talks anew yesterday on whether the fired HealthSouth Corp. chief executive officer directed a huge fraud.

U.S. District Judge Karon Bowdre told the jury to “start from scratch” after replacing an ill juror with an alternate.

Originally composed of seven men and five women and evenly split between blacks and whites, the jury had the same sex mix after the addition of the alternate.

But the dismissed juror, an older white man with “recurring health problems” that worsened as deliberations continued, was replaced with a black man, leaving a racial breakdown of seven blacks and five whites.

While Mr. Scrushy is white, the racial composition of the jury could be important because his defense compared his trial to the civil rights struggles of the 1960s during closing arguments. Mr. Scrushy was surrounded by black ministers and friends on many days in court.

In a speech from the bench apparently to counter criticism of the jury’s on-and-off deliberations, Judge Bowdre outlined hardships endured by the members, including deaths of relatives and friends, illnesses and postponed family responsibilities.

“In short, these jurors … have placed their lives on hold to perform this important civic responsibility of jury service,” Judge Bowdre said.

The judge again instructed jurors on the law in the case before sending them behind closed doors to start over on deliberations. Her announcement came after a private meeting with attorneys on both sides.

Mr. Scrushy was in court despite the death of his father on Monday. The father of the chief prosecutor, U.S. Attorney Alice Martin, also died after deliberations began.

The jury has met only 16 days since getting the case May 19 and has been off six days this month, including two this week — one for illness and the other for an unexplained emergency. The jury’s seemingly relaxed schedule repeatedly has been derided in the local media, particularly talk radio.

The jury reported being deadlocked on all 36 counts against Mr. Scrushy on June 3, but continued deliberations after Judge Bowdre gave them special legal instructions in an attempt to achieve a unanimous decision.

Prosecutors accuse Mr. Scrushy of directing a seven-year scheme to overstate earnings by about $2.7 billion at HealthSouth, the Birmingham-based rehabilitation and medical services chain. Mr. Scrushy is accused of making millions from the fraud through stock sales and bonuses.

Mr. Scrushy didn’t testify, but his defense blamed the fraud on former aides, including 15 one-time HealthSouth executives who pleaded guilty.

Mr. Scrushy is the first chief executive charged under the Sarbanes-Oxley corporate reporting law. He also is accused of conspiracy, false reporting, fraud and money laundering.

If convicted, Mr. Scrushy, 52, faces prison and millions of dollars in fines. Prosecutors also are seeking $278 million in assets they say are linked to the fraud.


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