As agents closed in on fraud at HealthSouth two years ago, then-CEO Richard Scrushy told an aide "everybody goes down" if problems with...
BIRMINGHAM, Ala. — As agents closed in on fraud at HealthSouth two years ago, then-CEO Richard Scrushy told an aide “everybody goes down” if problems with the rehabilitation giant’s financial statements become public, according to a secretly made recording played at Scrushy’s trial yesterday.
Later the same day, amid what prosecutors describe as more discussions of the scheme, Scrushy reminded the same executive there were eight children in the Scrushy family.
“They need their daddy,” said Scrushy, whose wife has since had another child.
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The recordings were made in March 2003 by former HealthSouth chief financial officer Bill Owens, who was cooperating with the FBI and has since pleaded guilty in the fraud. Jurors listened to recordings through headphones during Owens’ seventh day on the witness stand.
While prosecutors contend the recordings prove Scrushy was behind a scheme to overstate earnings by some $2.7 billion over seven years beginning in 1996, the defense claims they demonstrate Scrushy’s innocence by revealing Owens as the mastermind.
The defense suggested that Owens and prosecutors manipulated conversations and twisted Scrushy’s words from otherwise innocent conversations.
Several times in the recordings — made shortly before a raid of HealthSouth headquarters — Scrushy asked Owens “What do you want me to do?” and referred to things Owens had done regarding the company’s finances.
The first in a series of recordings indicated Scrushy may have suspected Owens was helping investigators. Near the start, Scrushy asked: “You’re not wired are you?”
“No,” replied Owens, who was wearing a microphone hidden in his necktie and a transmitter disguised as a cellphone. Owens is among 15 former HealthSouth executives who have pleaded guilty in the fraud.
On the recording, Owens told Scrushy that his wife had threatened to divorce him after learning of unspecified things he had been doing with the company’s finances. Owens told Scrushy he couldn’t sign an amended quarterly report — which Owens testified earlier contained bogus numbers — until he worked out things with his wife.
“If you … can’t sign your numbers, that you produced, you’re going to put yourself in a situation,” said Scrushy, who is on trial on charges including fraud and conspiracy in a 58-count indictment.
Scrushy said he prayed every day “that God will give us time to get on the other side. We’re building a great company.”
He added: “If you want to go public with all of this then you might as well get ready for … Get fired, it’s all gone, everybody goes down. And it’s all done.”
In a phone call later the same day, Scrushy is heard saying “Every company has got a bunch of [expletive] on their balance sheet.”
The judge let jurors listen to the recordings despite repeated defense objections.