Scrushy receives six-year sentence

June 29, 2007|By Bloomberg News

MONTGOMERY, Ala. -- HealthSouth Corp. founder Richard M. Scrushy was sentenced to six years and 10 months in prison for bribing former Alabama Gov. Donald Siegelman in a scheme to steer business to the company.

U.S. District Judge Mark Fuller handed down the sentence yesterday, a year after a jury convicted Scrushy, 54, and Siegelman, 61. Fuller sentenced Siegelman to seven years and four months.

The judge denied their requests for bail while they appeal their sentences. At the end of yesterday's hearing, both men were taken into custody.

"I'm a man who loves God, who loves his country, who loves his family," Scrushy told the judge before he was sentenced. "When you go through fire, you turn to God." he said. "God is in my life in a major way."

Prosecutors sought a 25-year term for Scrushy and a 30-year term for Siegelman. Scrushy was convicted of making a $500,000 payment to a state lottery campaign fund in exchange for a seat on an Alabama hospital regulatory board. The two men claimed it was a legitimate political donation.

Fuller also ordered Scrushy to pay a fine of $150,000 and $1,952.66 a month for the cost of his incarceration. Scrushy also must pay $267,000 in restitution. The judge ordered Siegelman to pay a $50,000 fine and restitution of $181,000.

Evidence presented at trial showed Scrushy attempted to conceal one of two $250,000 payments through a company which owed money to Birmingham, Ala.-based HealthSouth's investment bank, UBS AG.

Siegelman was convicted in the Scrushy bribery scheme and for obstruction of justice. Acting U.S. Attorney Louis Franklin urged Fuller to abandon sentencing guidelines and give Scrushy a harsher sentence.

In 2005, Scrushy was acquitted in a $2.7 billion accounting fraud trial in federal court in Birmingham. Five former HealthSouth chief financial officers testified at the trial that Scrushy directed the alleged scheme at the company, the largest U.S. owner of rehabilitation hospitals.

Scrushy's defense lawyer in Birmingham, Donald Watkins, blamed news of white-collar crime and accounting scandals since the 2001 collapse of Enron Corp. for his client's legal problems.

Federal prosecutors were looking for corporate chiefs as trophies to prove they were tough on corporate fraud, Watkins claimed. Scrushy's second lawyer, Art Leach, blamed the 2005 acquittal in Birmingham for the Montgomery bribery prosecution. Scrushy was indicted by a grand jury during his 2005 trial.

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