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Thursday, January 27, 2005

Parties Come Out Swinging in Scrushy Trial

The Birmingham News has a great article about the fireworks in the criminal trial of Richard Scrushy, former CEO of HealthSouth. 

According to the article, Aaron Beam, HealthSouth's former CFO, testified that

the company's second-quarter 1996 profits were insufficient to meet forecasts. Beam said he and subordinate Bill Owens told Scrushy about the shortfall before the formal public release of the financial results and that all legitimate methods of massaging profit were exhausted.

"He said, `Fix it. It's not an option to miss our numbers. You guys need to fix the numbers,'" Beam said, recalling the 1996 conversation with Scrushy.

Beam also reportedly testified that Scrushy "told us that if we ever got caught, he would deny it."   "He said, `You guys are on your own, but I will deny everything.'"

The article notes that on cross-examination, Scrushy's lawyer Jim Parkman got Beam to admit that he'd "lied to analysts, investors, banks and the public each time he signed a false financial statement." 

"Did you lie to the auditors, too?" Parkman asked.

"Anytime I presented the numbers, it was a lie," Beam said.

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