Richard M. Scrushy

Richard Marin Scrushy (born 1952) is the founder of HealthSouth, a global healthcare company based in Birmingham, Alabama. In 2006, he was convicted of bribing Alabama governor Don Siegelman for political favors, and is currently in prison awaiting appeal.

Early life and background

Richard M. Scrushy grew up in Selma, Alabama.

Scrushy began his college education at George Wallace Community College in Selma. He went on to Jefferson State Community College and received an Associate’s degree in applied science. After graduating from Jefferson State Community College, Scrushy enrolled in the respiratory therapy program at the University of Alabama at Birmingham (UAB).

Career and HealthSouth

After graduating college and passing his Registered Respiratory Therapist (RRT) certification exam, Scrushy started teaching at UAB. At the age of 24, he became the Program Director of the Respiratory Therapy department at UAB.

From there, Scrushy moved to St. Louis, Missouri to become the regional director of the respiratory therapy division at Lifemark Corporation. Lifemark owned and managed hospitals and had several divisions that ran services like pharmacies and physical therapy departments for hospitals. He continued to advance and became the Lifemark’s Chief Operating Officer and relocated to Houston, Texas.

Eventually, he moved into the hospital development and acquisition area, where he was given responsibility for everything east of the Mississippi, as well as Louisiana. When Scrushy moved back to Alabama, he began to pursue his dream of creating a comprehensive outpatient rehabilitation facility. In 1980, Congress had passed the Omnibus Budget Reconciliation Act, which recognized Comprehensive Outpatient Rehabilitation Facilities (CORF’s) as Medicare providers. This paved the way for Scrushy’s dream to be fulfilled by making traditional, hospital-based physical therapy more difficult to support and by making a comprehensive outpatient rehabilitation facility, like Scrushy was envisioning, eligible for Medicare reimbursements.

On January 23rd, 1984, Scrushy founded Amcare (short for “Ambulatory Care”) in Birmingham, making his dream a reality. In September, Amcare opened its first outpatient rehabilitation facility in Little Rock, Arkansas. By the end of the year, Amcare changed its name to HealthSouth.

In 1986, HealthSouth began to grow considerably and increased its revenues by an astonishing 256 percent. HealthSouth also dramatically increased their number of facilities it owned and operated in places such as Jackson, Mississippi, and Miami, Florida. In September of that year, HealthSouth began public trading on the NASDAQ market.

In 1987, HealthSouth expanded into two new fields: worker’s compensation and sports medicine. It started a program called WorkStart that focused on getting injured workers back in the work place much quicker. In that same year, HealthSouth acquired Neurorehabilitation Systems of America, a Detroit-based conglomerate of rehabilitation programs for victims of brain injury. By the end of 1987, HealthSouth had doubled its revenues and had nearly $100 million in assets. At that time HealthSouth had more than 1,200 employees in 18 facilities in 12 states.

In September 1988, HealthSouth’s common stock was listed on the New York Stock Exchange under the symbol “HLSH,” making them the 13th healthcare services company listed on the Big Board.

Over the next decade, HealthSouth’s impact in the healthcare world was enormous. The sports medicine programs gained international attention by bringing partnership with stars like Bo Jackson, Roger Clemens, Kyle Petty, Michael Jordan, Jackie Joyner-Kersee and Cory Everson.

By 2001, HealthSouth was the largest operator of inpatient and outpatient rehabilitation facilities, freestanding outpatient surgery centers, and freestanding diagnostic centers in the country. It had more than $4.3 billion in revenue and treated more than 100,000 patients a day. It had facilities not only in the United States, but also in Australia, Puerto Rico, the United Kingdom and Saudi Arabia. At this time, HealthSouth employed over 60,000 people and had well more than 2,000 locations in all 50 states.

Family

Richard is married to Leslie Anne Jones (his third wife) and is the father of nine children. He is also the grandfather to five grandchildren.

Legal battles

Birmingham Trial

Richard Scrushy was the first and only CEO to be tried under the Sarbanes-Oxley Act for the $2.7 billion fraud that occurred at HealthSouth. On June 28, 2005, the jury in Birmingham, AL found him not guilty. Five consecutive HealthSouth chief financial officers had all pled guilty to fraud and each of them implicated Scrushy, but Scrushy was acquitted on all 36 counts that were brought against him. [http://www.washingtonpost.com/wp-dyn/content/article/2005/07/01/AR2005070101819.html] The jury was quoted as saying, "The lack of evidence is what produced the verdict".Fact|date=February 2008

Montgomery Trial

On October 26, 2005, just four months after being acquitted, Scrushy was indicted on new charges of bribery and mail fraud in connection with former Alabama Governor Don Siegelman. Two former Siegelman aides were charged in the indictment as well.

In short, Siegelman was accused of trading government favors for campaign donations when he was governor from 1999 to 2003 and lieutenant governor from 1995 to 1999, and Scrushy was accused of arranging $500,000 in donations to Siegelman's campaign for a state lottery in exchange for a seat on a state hospital regulatory board.

On June 29, 2006, a Federal jury found both Scrushy and Siegleman guilty on multiple charges, including bribery, mail fraud, and obstruction of justice. [ [http://select.nytimes.com/gst/abstract.html?res=F60913F73F540C738FDDAF0894DE404482&n=Top%2fReference%2fTimes%20Topics%2fPeople%2fS%2fScrushy%2c%20Richard%20M%2e Former Governor Convicted With Ex-Chief of HealthSouth] June 30 2006, by Kyle Whitmire]

On June 28, 2007, Scrushy was sentenced to 82 months in federal prison, three years probation, $267,000 in restitution and a fine of $150,000. He was also ordered to perform 500 hours of community service. The judge specified Scrushy will pay the restitution to the United Way of America. An appeal bond was denied, and Scrushy was taken into immediate custody following sentencing. He is currently in the satellite camp of the U.S. Penitentiary in Beaumont, Texas. [ [http://blog.al.com/spotnews/2007/06/siegelman_gets_sevenplus_years.html "The Birmingham News:"Siegelman gets seven-plus years; Scrushy six-plus] ] [cite news|url=http://www.al.com/newsflash/regional/index.ssf?/base/news-30/1183077559115570.xml&storylist=alabamanews|publisher=Associated Press|title=Attorneys for former Ala. governor and ex-HealthSouth CEO to appeal|first=Bob|last=Johnson|date=2007-06-29] ["Scrushy Gets Nearly 7 Years in Bribery Case" The Wall Street Journal, 2007-06-29, page A3]

Bond violation

On March 29, 2007 Scrushy's probation officer filed a report saying Scrushy violated the conditions of his bond by leaving Orlando, Florida where he was on vacation and traveling to Palm Beach where he then boarded a yacht and sailed to Miami. The probation office suggested that he should be placed under house arrest and that he should be forced to wear an electronic tracking device at all times. On April 30, 2007, after appeal, the Alabama District Court ruled Scrushy must wear a GPS tracking device at all times and could not leave the Northern and Middle District of Alabama for the duration of his bond. [http://media.myfoxal.com/docs/ScrushyRuling2007Apr30.pdf] That usage ended with his sentencing and imprisonment.

References

* [http://www.richardmscrushy.com/biography.aspx Richard M. Scrushy -- Biography ]

External links

* [http://www.richardmscrushy.com Richard Scrushy's Website]
* [http://www.sec.gov/litigation/litreleases/lr18044.htm SEC Litigation Release - Accounting Fraud]
* [http://www.al.com/specialreport/birminghamnews/healthsouth/ Birmingham News - Special Report]
* [http://www.al.com/news/birminghamnews/index.ssf?/base/news/1176192983257330.xml&coll=2&thispage=1 Birmingham News - Bond Violation]
* [http://www.usatoday.com/money/industries/health/2004-10-25-scrushy-cover_x.htm USA Today - Richard Scrushy's Televanglism]
* [http://www.morningviewpoint.com/ Viewpoint Television Program]