The charges included conspiracy to commit fraud, filing false financial statements, money laundering and securities and wire fraud while he headed up the Birmingham-based operator of rehabilitation and outpatient surgery centers.
Federal prosecutors said they would seek more than $278 million in forfeitures from Scrushy, including a plantation, a yacht, two airplanes, four luxury cars, a diamond ring, antique rugs and paintings by famous artists. He faces up to 650 years in prison and more than $36 million in fines if convicted.
“As alleged, instead of telling the public the truth, Scrushy and his accomplices lied — they cooked HealthSouth’s books and filed false financial statements … to cover up their scheme,” Assistant Attorney General Christopher Wray told a news conference.
Donald Watkins, Scrushy’s lead attorney, said his client “will not be pleading guilty in this lifetime.”
A federal judge in Birmingham has set a trial date of Jan. 5, 2004. Scrushy is expected to be released on $10 million bond and as part of the agreement, he must put up all four of his Alabama properties and all 297,000 shares of HealthSouth he still owns.
Scrushy is not allowed to travel outside Alabama and must wear an electronic monitoring device on his ankle.
Scrushy enforced discipline among members of the conspiracy through threats, intimidation and payoffs, Wray said. “Scrushy also eavesdropped on HealthSouth employees’ telephone calls and e-mails and tried to buy their silence,” he added.
Prosecutors said Scrushy and his accomplices devised a scheme, starting in 1996, to inflate the company’s earnings by making false and fraudulent entries in its books and records.