Sunday, July 01, 2007

Justice takes a surprise turn - the man that got away goes to prison

What?! This inverts my entire sense of how the world works. Can I rely on nothing?!

Two years ago Richard Scrushy escaped what seemed to be a slam dunk conviction. The outsider consensus at the time was that the charismatic Mr. Scrush used his nefarious talents, and the language of the southern baptist, to persuade a religiously inclined jury to disregard the evidence. Certainly the people I personally know who knew him well felt that way.

Today, accidentally, I read that he's gone to jail. Here's what happened, emphases mine: - Business - Richard Scrushy's road to prison

Richard Scrushy, the rehabilitation king turned TV preacher, is trading his 92-foot yacht for a jailhouse bunk.

The former HealthSouth Corp. chief executive – cleared in a landmark corporate fraud trial in Birmingham but convicted on unrelated bribery charges in Montgomery – was sentenced late Thursday to nearly seven years in prison.

Scrushy's third wife, Leslie, a former HealthSouth secretary, cried as marshals took the millionaire with nine children into custody.

The term was imposed two years after Scrushy beat charges in Birmingham that he presided over a $2.6 billion (U.S.) accounting fraud at HealthSouth, a sweeping acquittal in sharp contrast to high-profile corporate convictions won against Enron Corp., WorldCom Inc. and Tyco International Ltd. executives.

After losing the case involving false earnings reports at the rehabilitation company Scrushy founded, federal prosecutors targeted his dealings in 1999 with then-Gov. Don Siegelman, who was also convicted and sentenced to seven years and four months in prison.

So Scrushy – the brash guy from small-town Alabama who mostly recently cast himself as a minister trying to save lost souls – is being sent far from his big boat, the Chez Soiree, and his estate in Birmingham, where HealthSouth is based.

A judge ordered him to serve six years and 10 months in federal prison, where there's no chance of parole. He must pay $417,000 in fines and restitution, serve three years on probation, and perform 500 hours of service work once freed.

It's a long fall for a man who once hobnobbed with celebrities and politicians. Asking the judge to spare him from prison, Scrushy, 54, portrayed himself as a humble man of God who did nothing wrong. "I'm just a pastor," he said.

Scrushy studied respiratory therapy before coming up with the idea in the early 1980s for a company focused on rehabilitation in outpatient clinics rather than hospitals.

Pooling money from investors, Scrushy launched what became HealthSouth, which billed itself as the nation's largest rehabilitation company with some 2,000 locations worldwide. Reported revenues exceeded $3.5 billion.

But something sinister was going on. Evidence at Scrushy's first trial showed a group of executives who called themselves "the family" began fudging earnings in a bid to bolster sagging stock prices. The company overstated earnings by $2.6 billion from 1996 through 2002.

Fifteen former executives pleaded guilty, and some said Scrushy directed the scam. But in a stunning defeat for the government, Scrushy was acquitted on 36 counts of fraud, false corporate reporting and making false statements to regulators.

Then came the bribery charges. Scrushy was accused of arranging $500,000 in payments for a seat on a board that regulates Alabama hospitals. He was convicted.
I'm sure there will be an appeal, but even so! The south is not what it was. An ex-governor and a wealthy evangelical con man both sent to prison for 7 years - without parole? What planet am I living on again?

The only thing that seems believable about this is how quietly the media has treated the story.

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