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Prosecutors: HealthSouth Tapes Are Key

Feb 14, 2004 | AP

Federal prosecutors say secret tape recordings are powerful evidence that point to former HealthSouth chief executive Richard M. Scrushy's guilt on securities fraud charges.

Scrushy's lawyers have asked U.S. District Judge Karon O. Bowdre to exclude the tapes from Scrushy's trial set for Aug. 23. The government responded in a court filing Friday saying the tapes are key to the case.

The tapes were made in March 2003 when then-chief financial officer Bill Owens wore a recording device for the FBI in an effort to prove Scrushy was involved in securities fraud at the Birmingham-based firm.

Scrushy was indicted last year on 85 criminal counts that include securities fraud, conspiracy and money laundering in an accounting scandal at HealthSouth, the nation's largest provider of health care services. Prosecutors allege Scrushy directed a scheme to overstate earnings by more than $2.7 billion.

Those recordings prompted FBI agents to search the company's headquarters last March 18, and made public a probe that has netted 15 guilty pleas from former HealthSouth employees, the government says.

"The tape recordings conclusively demonstrate that Scrushy's criminal activity was ongoing," prosecutors said in a court filing reported by The Birmingham News on Saturday.

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