Lawyers for Richard Scrushy hammered at the testimony of the fifth former finance chief to take the stand against the fired HealthSouth...
BIRMINGHAM, Ala. — Lawyers for Richard Scrushy hammered at the testimony of the fifth former finance chief to take the stand against the fired HealthSouth CEO yesterday after the judge excused a sick juror.
Resuming testimony after a weeklong break, defense attorney Jim Parkman challenged former HealthSouth CFO Weston Smith on everything from the dates that meetings occurred to whether he really cried during earlier testimony about a massive accounting fraud.
“There weren’t any tears coming out of your eyes, were there?” Parkman asked accusingly, implying Smith was faking emotion to build sympathy with jurors.
“That is absolutely incorrect,” said Smith, one of 15 former HealthSouth executives to plead guilty in a conspiracy to inflate earnings.
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Parkman also suggested Smith turned against Scrushy to save his wife, Susan Smith, who was a senior vice president of finance at HealthSouth. Testimony has indicated she may have met with people involved in the fraud but was not charged in the scheme.
Smith denied his wife was involved in the accounting scheme but acknowledged she provided financial information to people in on the conspiracy.
Smith denied discussing the fraud with his wife and said his testimony against Scrushy has “nothing to do with her.”
The trial continued with 17 members on the jury panel — including five alternates who won’t participate in deliberations once testimony ends — after U.S. District Judge Karon Bowdre excused a member too sick to remain.
Prosecutors argue Scrushy directed a scheme to overstate earnings by $2.7 billion and made millions from the conspiracy through stock sales, bonuses and salary.
The defense claims subordinates committed the fraud on their own and lied to Scrushy to keep it secret.
In his cross-examination, Parkman referred to a statement Smith gave the FBI days before agents raided HealthSouth headquarters in March 2003, asking Smith if he ever told investigators he hadn’t met with Scrushy to discuss the fraud.
“I’m positive I didn’t say that,” said Smith.
Parkman showed that Smith, however, once asked another former CFO, Bill Owens, to be the godfather of his children.
The defense has portrayed Owens as the leader of the fraud, but Smith testified they are no longer friends.
“You’re talking about ancient history, sir,” Smith told Parkman.
Recalling the time in summer 2002 when he was trying to decide whether to sign false financial statements or quit HealthSouth, Smith said the company’s lead attorney, Bill Horton, told him that being a CFO was like being in the Mafia, commenting that “You just can’t get out.”
Horton has not been charged with any crimes.
Scrushy is charged with conspiracy, fraud, money laundering, obstruction of justice and perjury. He also is accused of false corporate reporting in the first case of a CEO being accused of violating the Sarbanes-Oxley Act, passed in 2002.
Scrushy could get what amounts to a life term and be ordered to pay fines up to $278 million in assets if convicted.