Health South Chief on Stand Defends Pay

BIRMINGHAM, Ala. (CN) - On his second day on the stand, Richard Scrushy continued to blame his five former finance chiefs for the fraud at HealthSouth Corp., and he again denied any involvement in the scheme. He denied paying for the breast implants of a singer in a girl band and defended a deal with his father's computer company.

Scrushy sparred with plaintiffs' attorney John Haley during cross examination in the civil trial and told him, "I did what I was expected to do in terms of my fiduciary responsibility as CEO."

Scrushy disputed numbers presented by the plaintiffs showing that he earned $226 million at the same time HealthSouth was losing $1.8 billion.

Haley asked Scrushy if he still thought he was one of the biggest losers in the fraud that put the company on the verge of bankruptcy, and the former CEO responded, "I consider myself one of the biggest."

During cross-examination, Scrushy denied paying for breast implants for a singer in a girl band he promoted and defended his decision to give his father's computer company a contract with HealthSouth.

The bench trial is being heard by Judge Allwin E. Horn in Jefferson County Circuit Court, but Scrushy, who is serving 7 years in a Texas prison on unrelated bribery charges, is testifying at the Hugo Black Federal Courthouse, as he is a federal prisoner.

Scrushy was acquitted by a jury in 2005 on federal charges related to the fraud. This civil suit was filed by HealthSouth shareholders, who are seeking $2.6 billion.

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