Former HealthSouth chief Richard Scrushy accumulated $22.7 million in real estate during his rags-to-riches rise in the corporate world – assets that could be frozen or seized by the federal government if a judge allows it.
Federal officials are investigating claims that Scrushy inflated his HealthSouth earnings to protect the value of his own stock.
In the wake of a Securities and Exchange Commission civil lawsuit and federal allegations that Scrushy and HealthSouth faked at least $2.5 billion in profits, a federal judge on Wednesday will consider whether his personal assets should remain frozen and possibly subject to seizure.
The Birmingham News examined property owned by Scrushy individually and found real estate in Alabama and Florida with a market value of $22.7 million, not including cars, boats, airplanes, bank accounts and other investments.
Scrushy’s personal holdings make up a fraction of the $169 million he made in salary, bonuses and exercised options since 1992. In 1997 alone, he took home $106.8 million, enough to rank him as Business Week’s third highest paid executive in America.
FBI agents continue to look for offshore bank accounts and follow the trail of dozens of trusts, corporations and personal and family businesses he set up with money made from the dramatic growth of HealthSouth over the last 15 years. Investigators are examining personal corporations and bank accounts to see if they may have benefited from illegal profits.
Scrushy’s new lawyer, Donald Watkins, argues that the federal government has no authority to freeze Scrushy’s assets.
“Just because they freeze it doesn’t make it right,” Watkins told The News for a story Sunday. “If they can freeze Richard Scrushy’s assets they can freeze anybody’s. He hasn’t been convicted or tried for anything. … If the government wants to freeze his assets, it has the burden of demonstrating wrongful conduct. It has not done that.”
Watkins refused to discuss Scrushy’s finances or the nature or size of his assets. “That is a personal and private matter.”
Records indicate Scrushy owns mansions in Vestavia Hills, on Lake Martin, in Orange Beach and in Palm Beach, Fla.
Most expensive, according to tax records, is the Palm Beach home, built on a 34,600-square-foot lot that Scrushy bought in March 2001 for $10.9 million. Scrushy sold another Palm Beach property for $4.15 million last August, records show.
A combination of parcels in and around Scrushy’s slate-roofed Vestavia Hills home on Longleaf Street are valued by tax assessors at about $2.6 million, though an earlier assessment priced the property about $800,000 higher, records show. That property combination includes a 20-room, 15,681-square-foot home at 2406 Longleaf St.
Scrushy’s estate on Lake Martin in Tallapoosa County also has drawn much attention from across the nation. With three boat docks, a swimming pool, an aircraft hangar and 14,000 square feet in the main house, the property is valued at more than $5 million, said Linda Harris, a Tallapoosa County appraiser. Scrushy also owns two other lots in the county worth about $1 million, she said.
Other Scrushy properties include land described in tax records as a skating rink in Vestavia Hills, a farm in Montgomery County and a two-story office building in West Palm Beach, Fla. Those properties together are valued at $2.1 million.
Although records of Scrushy’s car ownership are unavailable, he has at least 13 boats registered in his name. The boats range in size from 9 feet to 50 feet, and include yachts, Cigarette boats, Sea Doo personal watercraft and other pleasure boats. The value of those boats is not listed on the registrations.
In addition to assets directly in Scrushy’s possession, federal officials have said they are looking into Scrushy businesses including Marin Air, Marin Properties and others they say are linked to him personally.
Marin Air is the company that owns Scrushy’s airplanes, according to court records. Scrushy, a pilot, owns two airplanes through that company, including a 1998 Aviat Aircraft Husky A1A and a 14-seat Cessna 208 prop plane. HealthSouth also has a fleet of 11 planes.