Richard Scrushy's lawyers tried to discredit the testimony of a former HealthSouth executive yesterday, portraying him as a participant in a fraud rather than the innocent outsider he claimed to be.

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BIRMINGHAM, Ala. — Richard Scrushy’s lawyers tried to discredit the testimony of a former HealthSouth executive yesterday, portraying him as a participant in a fraud rather than the innocent outsider he claimed to be.

Attempting to undercut Leif Murphy’s testimony that he quit the rehabilitation giant after Scrushy flew into a rage when confronted about inflated earnings, defense attorney Jim Parkman brought out that Murphy once attended a meeting with eight people identified as being in on the scheme.

The defense for Scrushy, HealthSouth’s former CEO, in his corporate fraud trial contends a group of executives called “the family” conspired to inflate earnings at HealthSouth and hid it from Scrushy. Prosecutors claim Scrushy was the driving force behind a conspiracy to overstate earnings by some $2.7 billion from 1996 through 2002.

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“You a member of this family?” Parkman asked Murphy in court yesterday.

“Absolutely not,” he responded.

“Did you know about the fraud that was going on at HealthSouth?” Parkman shot back.

“I did not,” said Murphy, a former group vice president in treasury.

He testified he realized something was wrong with the company’s finances after seeing financial statements that, according to previous testimony, normally were viewed only by top executives involved in the fraud.

Murphy has said he quit HealthSouth in 1999 despite being offered $1 million to stay once he figured out the fraud.

Murphy previously testified that Scrushy got angry and yelled after Murphy confronted him in 1999 about forecasts based on fabricated earnings.

Scrushy is on trial on charges including conspiracy, fraud, money laundering, obstruction of justice, perjury and false corporate reporting.