Risk Management

Scrushy at Home on the Ranch

The former HealthSouth CEO does not want to travel to Alabama to testify in a civil lawsuit because he enjoys the comforts of his white-collar prison.
Alan RappeportJune 6, 2008

For Richard Scrushy, the imprisoned former CEO of HealthSouth, the grass is greener on his side of the fence. That’s because his comfortable white-collar federal prison in Beaumont, Texas, does not actually have a fence.

So Scrushy, who is serving time for fraud and bribery, wants to stay put in his prison rather than travel to Birmingham, Alabama, and stay in a lockup jail while he testifies on civil charges. Scrushy’s lawyer, Martin Adams, told The Birmingham News that his client enjoys television and an open environment devoid of fences and barbed wire.

“He would be locked up for nine days in the Shelby County Jail,” said Adams. “That’s a lot worse than where he is.”

Scrushy’s resistance is in response to an order Monday from a federal judge that he is to appear for a videotaped deposition on June 16 in front of 25 lawyers. He would be returned to Texas after a week.

The ex-CEO is being sued by shareholders and bondholders of the Birmingham-based hospital chain and is being called to testify about his role in the $2.7 billion fraud that occurred at HealthSouth from 1996 through 2002. UBS and Ernst & Young are also implicated in the lawsuit. Scrushy was found not guilty of manipulating earnings in a criminal trial but was convicted of bribing Don Siegelman, former governor of Alabama, for a seat on the health-care policy board.

Lawyers for the plaintiffs were shocked that Scrushy would resist testifying in Birmingham because it is inconvenient. “His arrogance is just overwhelming,” Doug Jones, an attorney for the investors, told the Associated Press. “He wants 20 or 25 lawyers and theirs staffs to trek to Beaumont to see him.”

Siegelman was recently freed on appeal bond from his prison sentence. Scrushy, who now seems to detest travel, is serving seven years and was denied an appeal bond out of fear that he might flee the country.