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The Honolulu Advertiser

Posted on: Thursday, May 26, 2005

Judge tries to avoid HealthSouth mistrial

By Jay Reeves
Associated Press

BIRMINGHAM, Ala. — The judge in Richard Scrushy's fraud trial is trying to prevent the case against the former HealthSouth Corp. CEO from winding up in a deadlocked jury and mistrial.


Responding to questions from jurors, U.S. District Judge Karon Bowdre instructed the panel for a third time yesterday on a pivotal conspiracy charge, a complicated Count One with a verdict form that is four pages long covering a range of alleged white-collar crimes.

After saying that either an acquittal or a guilty verdict must be unanimous and explaining details of the decisions required for a verdict, Bowdre sent the panel back to begin a fifth day of deliberations.

"I hope these clarifications help and that you will continue to work hard to reach a unanimous decision," she said politely, but firmly.

The jury recessed about five hours later without a verdict. Deliberations resume today.

Bowdre's instructions followed handwritten notes in which jurors told the judge "we cannot unanimously agree on a verdict" and that her instruction on the conspiracy charge "contradicts itself."

Outside court, attorneys on both sides cautioned against reading too much into the jury's notes. It's too early to be worrying about a mistrial since the jury must sift through the testimony of dozens of witnesses it heard over 3 months, they said.

But the Scrushy case wouldn't be the first recent high-profile executive prosecution to end in a mistrial.

The first trial of investment banker Frank Quattrone of Credit Suisse First Boston ended in a hung jury in 2003, but he was convicted in a second trial on federal obstruction charges. And jurors deadlocked on 17 counts in the trial last summer of Michael Rigas, a son of Adelphia Communications Corp. founder John Rigas.

In Kansas, a federal jury in December couldn't agree on fraud charges against two former executives with Westar Energy Inc. Former CEO David Wittig and an aide were accused of conspiracy and other crimes.

And last year in New York, a judge declared a mistrial in the case involving former Tyco International Ltd. CEO L. Dennis Kozlowski and former CFO Mark Swartz, who were accused of stealing $600 million from the company. The judge said there had been undue pressure on one juror. Closing arguments in the retrial were this week.

Scrushy is accused in a nearly $2.7 billion earnings overstatement scheme at the medical rehabilitation and services chain.

Prosecutors claim Scrushy led the systematic fraud at the Birmingham-based company from 1996 through 2002.

The defense blames the accounting scheme on former subordinates, including 15 one-time HealthSouth executives who pleaded guilty.

If convicted, Scrushy could face a maximum sentence that amounts to life imprisonment plus millions of dollars in fines. Scrushy could also be ordered to forfeit as much as $278 million in assets.