Trial By Media: HealthSouth CEO Richard Scrushy took up televangelism to manipulate jury pool in fraud case

 Scrushy, the former CEO of HealthSouth Corporation, a global healthcare company based in Alabama, had built his firm into the country's largest chain of for-profit rehabilitation centers


                            Trial By Media: HealthSouth CEO Richard Scrushy took up televangelism to manipulate jury pool in fraud case
(Getty Images)

"I found out early on in my career, it doesn't matter about the law, it's about being able to tell a story," Jim Parkman, the attorney who represented HealthSouth founder Richard Scrushy in the 2005 fraud case, said. 

Scrushy, the former CEO of HealthSouth Corporation, a global healthcare company based in Alabama, had built his firm, a public traded corporation, into the country's largest chain of for-profit rehabilitation centers. Scrushy was helming the world's fastest-growing healthcare company in the early 2000s. He was a charmer, and aspired to be like Steve Jobs.

He wanted to be a rockstar CEO, in the literal sense, being a part of a country-rock band. However, on November 4, 2003, his rising fame came to a screeching halt after he was accused of money-laundering and fraud.  The government accused him of inflating company earnings reports. It was one of the largest financial scams investigated by the Justice Department.

Scrushy was eventually indicted in 2004 after charges of financial fraud were brought against him by the U.S. Securities and Exchange Commission, following an FBI investigation. Seven chief financial officers of the firm testified against him. 

Screenshot from Trial By Media shows Richard Scrushy outside a courtroom. (Netflix)

As the case reached the media, it exploded. All of Scrushy's personal wealth was laid bare in front of everyone. He owned four houses, over thirty cars, ten boats, two planes,  and fine art by Picasso, Renoir, and Miro. He was dubbed the "Insatiable King Richard" by the media. His reputation was maligned, there was no turning back for him. Scrushy, at the time, was looking at over 680 years of prison sentence. "The media put everything I had on canvas," Scrushy said.

"You gotta have the fire in your belly. You cannot be afraid of the risk. HealthSouth was very important to me and I did live and breathe it every day," he added, reminiscing his days at the corporation. There were 85 counts of charges laid against him. Scrushy, at the time, became the most hated man in Birmingham, Alabama. 

Scrushy wanted to refute the claims made in the media, he wanted to respond to the accusations, however, he was advised to not speak of the case publicly by his legal team. Uncertain of what to do amidst the media trial, he hired Donald Watkins as his attorney. Watkins, in contrast to other lawyers, told him to go out and talk to everyone and tell them he was innocent. Watkins also thought of garnering public support at a time when most local residents despised his client. He struck gold.

"The white community hated him at most parts but the black community was neutral," Watkins said. The lawyer reportedly advised him to seek assistance from the African-American community in the Bible belt. That is when Scrushy approached bishop Jim Lowe. He told the bishop that his family was hurt and they needed a place to worship.

HealthSouth signage is visible outside one its rehabilitation centers November 5, 2003 in Arlington Heights, Illinois. An indictment was announced November 4 in Birmingham, Alabama, charging Richard M. Scrushy, former CEO and chairman of the board of HealthSouth Corp., with money laundering and other offenses. The billion dollar scheme defrauded members of the public who invested in HealthSouth.

"I feel like this is where the Lord told me to come," he told the bishop who accepted him into his church. Scrushy began frequenting black churches and took the pulpit to talk to the community. He talked about his faith and left money everywhere. 

Baffled by the sudden visits to black churches, he was accused by many of attempting to manipulate the jury pool. However, Scrushy did not stop. He bought his own television show called 'Viewpoint' and became its host, with his wife as the co-host. Scrushy transitioned from a CEO to a religious talk show host.

"We had to create our own new TV network and speak the truth," his lawyer said. Scrushy, within months, reinvented himself as a televangelist, with the media suspecting him of attempting to win the Bible belt of Birmingham. 

With the trial date approaching, Scrushy and Watkins decided to hire attorney Jim Parkman in his defense team. They needed someone whom the jurors could relate to. They did not choose Parkman for his legal knowledge but for his "good ole boy" persona and his southern drawl, which would resonate with the southern jurors; and Parkman knew how to play the jurors well. He knew how to tell a story.

Board of Directors of the HealthSouth Corporation and Robert May, Acting Chief Executive officer and Chairman of the Compensation Committee for HealthSouth, raise their right hands as they are sworn in before testifing before a House Subcomittee on Oversight and Investigations hearing on Capitol Hill November 5, 2003 in Washington DC. (Getty Images)

Although the government's case against Scrushy appeared ironclad with nearly everyone key in the case testifying against him, Parkman decided to pick holes in the personalities of the seven CFOs whose testimonies the government was relying on to nail Scrushy. As the prosecution laid out hard, straight facts about financial fraud, the jury appeared bored with the prosecuting attorneys using complicated terms.

Parkman knew what the jurors wanted was something entertaining to focus on. He portrayed his client as a victim too - Scrushy, a respiratory therapist, who had built the company to what it was with his hard work. He deserved the wealth he had earned, the defense argued. They also began picking at the personal lives of the CFOs, outing one of their extramarital affairs for the first time in court. Parkman began portraying all of them as liars. 

More than 50 days after the lengthy trial and appealing to the jurors' emotions, Scrushy's defense team won the case. The verdict was not guilty despite mounting evidence against him.

"He had successfully transformed himself into a member of the oppressed community," a prosecuting attorney said of his attempts to pander to the black community's established faith routes.

Bishop Lowe said: "After the trial, I told him the reason you were found not guilty is because God gave you grace. This is your church home. This is where you belong and you must remember that."

"We did not see him too much more after that at all," Lowe added. Scrushy was free. 

However, months after the trial ended, the HealthSouth CEO was indicted again, for bribing former governor of Alabama Don Siegelman. The government had not let Scrushy go and was closely following him after the fraud trial. He was convicted of bribery and sentenced to seven years in prison. While he was in prison, a civil court found him liable for the HealthSouth fraud, and he was ordered to pay $2.8 billion and was banned from leading any publicly traded company.

"They took everything away when I was in prison," Scrushy told Netflix. He was released after five years of imprisonment. He now works as a small business consultant in the Houston area. 

Netflix's docuseries 'Trial By Media' premiered on May 11.

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