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| Resources |
 Commentary | ||
| Former
CEO of HealthSouth, Richard Scrushy Acquitted. HealthSouth Corp. ("HealthSouth") founder Richard Scrushy walked away a free man after a jury panel acquitted Scrushy of all 36 counts of fraud, false corporate reporting and making false statements to regulators. Scrushy still faces civil charges by the Securities and Exchange Commission. With 5 former CFOs of HealthSouth pleading guilty and testifying that Scrushy led the fraudulent scheme to inflate earnings by $2.7 billion, this case should have been an open and shut case. Witnesses testified the conspiracy began in 1996, when they said Scrushy ordered HealthSouth to switch from "aggressive accounting" to outright fraudulent figures. Yet, amazingly, 8 jurors who met with reporters after the verdict said key witnesses were not believable and the prosecution failed to present evidence linking the fraud to Scrushy. Since his acquittal, Scrushy has been publicly stating that he would like to return to HealthSouth as Chairman and CEO. Although, I was surprised at the outcome, I do respect the jury's decision. Some guys just don't know when to quit while they are ahead. What are the odds that 5 different CFOs all decided to inflate earnings without his knowledge? Even if one were to believe he was truly innocent, Scrushy just proved that he was completely incompetent by not knowing what was going on with a company he founded. With Scrushy's defense team reminding the jury in closing arguments of the struggles of the civil rights era in Alabama and how juries helped the movement succeed, many questioned the "race" strategy considering that Scrushy is Caucasian while the jury was composed of 7 "blacks" and 5 "whites". I personally do not believe race was an issue. However, Scrushy was known to contribute heavily to his local hometown in Alabama including several churches attended by African-Americans. If anything, the trial was about economics. Scrushy was a hometown hero in these communities. There was no way Scrushy was going to get convicted in the state of Alabama. If this trial were to be held in New York, Scrushy would have been facing 25 years in prison. Of the CEOs found guilty of corporate fraud, (Worldcom's Bernie Ebbers, Tyco's Dennis Kozlowski and Adelphia's John Rigas), all were tried and convicted in New York. Something government prosecutors should take note of when the trial begins against Kenneth Lay, the former Chairman and CEO of the Houston, Texas based Enron Corporation. © 2005 Nelson Chin. To inquire about consulting or speaking engagements, e-mail: Nelson Chin | ||
| Other
Commentaries: Former Computer Associates CEO faces new indictment. Could auditors have detected the fraud ? Adelphia and ex-CEO Rigas to settle fraud case. Arthur Andersen Conviction Overturned: Too Little Too Late. Worldcom's Ebbers faces $30 Million Fine and life in prison. Russian Oil Tycoon Mikhail Khodorovsky: Guilty of Fraud and Victim of Politics? Accounting Giant KPMG Probed for Unlawful Conduct. Former CEO of HealthSouth Scrushy acquitted. Former Tyco CEO Kozlowski convicted, faces 30 years. Outgoing TOYS R US CEO's Favorite Toy? The Golden Parachute. Sayanora Citigroup. Japan shuts down Private Banking Unit. Heist at the Bellagio or plot twist for the New Ocean's Eleven sequel? Eisner versus Ovitz. The Showdown in Tinseltown. Marsh sinks deeper in insurance scandal. Managers disconnected at Verizon. What is Martha stuffing in her stocking this holiday season? Is Apprentice Street Smart Candidate a College Graduate? Outsourcing Employees - coming soon. | ||
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