BIRMINGHAM, Ala. (WIAT) — Just over a decade after his release from federal prison, former HealthSouth CEO and Chairman Richard Scrushy has been ordered to turn over bank account records allegedly involved in a million-dollar money laundering scheme.
A Tuesday court filing is the latest effort by Encompass Health, formerly HealthSouth, to find the $2.8 billion Scrushy was ordered to pay the company for his role in the HealthSouth financial scandal of 2009.
“I told the judge, ‘Give them anything they want,’ cause none of this is true,” Scrushy said. “It’s a fraud. It’s a boondoggle. It’s a waste of money.”
Attorney Eric Guster said this filing proves that Encompass Health believes the money is out there somewhere.
“Until the $2 billion is paid back, they can track all of his income until death,” Guster said. “That’s why he has to report exactly how much money he has.”
Plaintiffs contend Scrushy has been conducting financial business through concealed entities owned by family and friends. According to court documents, credible evidence has been presented to suggest Scrushy has written checks through a previously undisclosed bank account exceeding $7 million, including two checks to himself totaling $3 million.
Plaintiffs claim that the account sits under the name “Eddie Briskett,” who is a convicted felon currently incarcerated with the Alabama Department of Corrections.
Briskett’s address on the checks — a P.O. box in Spring, Texas — is an address Scrushy has repeatedly used to conduct personal business for years.
On December 3, 2020, Briskett had a hearing before the Alabama Board of Pardons and Paroles. Before the hearing, Dennis Estes drafted a letter to the board of pardons and paroles stating he had an agreement in place to handle Briskett’s personal investment portfolio of $7.1 million. According to court documents, a draft of this letter was sent to Scrushy. The draft also said Estes was “structuring these investments through Mr. Larry Harvey,” a friend of Scrushy.
Estes is a convicted felon and an associate of Scrushy. The two met in federal prison.
On July 22, 2020, Scrushy’s secretary allegedly sent Scrushy an email including a financial cover letter of Scrushy’s son-in-law, Martin Adams, sending copies of checks to Briskett in the Mobile County Metro Jail.
The court found that, at the very least, the evidence suggests that Scrushy — or someone “acting in concert with him” — opened the account in Briskett’s name and Scrushy has control of its assets.
“I’ve never received any money from any inmate period, and I’ve certainly never signed on a bank account with an inmate,” Scrushy said. “I have no involvement in any of Eddie Briskett’s financial situation or his family’s at all.”
As of now, Scrushy claims that he is still unemployed and that his only source of income is his Social Security. The court has ordered that Scrushy and Estes produce all documents and records in their possession, in relation to the account, by Tuesday.
In 2003, the Securities and Exchange Commission filed a $1.4 billion accounting fraud charge against Scrushy and HealthSouth Corporation. At the time, HRC was the nation’s largest provider for outpatient surgery, diagnostic and rehabilitative healthcare services.
According to the complaint, shortly after HRC went public in 1986, the company began to artificially inflate its earnings at Scrushy’s command.
The SEC maintained the belief Scrushy had personally profited from the artificial inflation by selling over 7 million shares in HRC stock, as well as receiving salary and bonus payments based on these inflated earnings.
The complaint contended that on a quarterly basis senior officers reported HRC’s actual results to Scrushy. If Scrushy believed these fell short, he would tell the officers to “fix it” by recording false earnings, the complaint said.
By late 2002, HRC’s assets were overstated by at least $800 million, or 10%, the SEC claimed. It reported that this was to meet or exceed Wall Street’s expectations.
The SEC alleged that since 1999, at the behest of Scrushy, HRC repeatedly overstated its earnings by at least $1.4 billion in total.
The SEC’s formal complaint stated that, “Scrushy knew or was reckless in not knowing that HRC’s financial statements materially overstated its operating results.” As a result, the SEC accused Scrushy of aiding and abetting several federal securities laws violations.
Scrushy was acquitted of all charges by the SEC on June 28, 2005.
However, in June 2006, following an indictment from a federal grand jury in Montgomery, both Scrushy and former Alabama Governor Don Siegelman were convicted on 30 counts of money laundering, extortion, obstruction of justice, racketeering and bribery.
It was alleged Siegelman sold a seat on a state regulatory board to Scrushy in exchange for $500,000 in donations to his 1999 campaign. Siegelman was released on February 18, 2017.
Scrushy served six years in jail before being released on July 15, 2012. Scrushy has continually maintained that he is innocent and nothing illegal ever occurred.
Scrushy said he and his family are simply trying to live their lives and move on from the HealthSouth chapter of it.
“I’m out here in Houston, in the Houston area, retired,” Scrushy said. “[I’m] living here with my wife and I still have one child at home. And we are just trying to get by every day and trying to enjoy what bit of life we have left.”
Scrushy said his family has filed suit against Encompass Health for what he said it has put them through.
CBS 42 reached out to Encompass Health for a comment but did not hear back.