BIRMINGHAM, Ala. -- Richard M. Scrushy, former chairman and chief executive of HealthSouth Corp., said he had "no knowledge" of the $2.6 billion fraud that nearly destroyed the rehabilitation company he founded, in his first public testimony on the matter. Mr. Scrushy, who was acquitted of criminal charges related to the HealthSouth accounting scandal in 2005, took the witness stand Wednesday in the trial of a civil action against him by HealthSouth shareholders. The former CEO, who is serving a prison term in an unrelated case, didn't testify publicly during the five-month HealthSouth criminal trial. In Wednesday's testimony, the 56-year-old Mr. Scrushy sought repeatedly to distance himself from the five chief financial officers who served under him at HealthSouth, all of whom pleaded guilty in connection with the fraud. They have testified that Mr. Scrushy was complicit in systematically overstating HealthSouth's earnings in a scheme that spanned about six years. "I certainly had no knowledge of anything they were doing in terms of moving numbers around in the company," Mr. Scrushy testified Wednesday. The former CEO, who wore a dark-gray suit with a burgundy tie, and occasionally donned wire-rimmed glasses to read financial documents, said HealthSouth employed the auditing company that is now Ernst & Young at great expense, to ensure that its books were properly reviewed. He also underscored measures he said he implemented to ensure "moral and ethical" behavior at HealthSouth, such as creating a compliance program in its early days.
