Former HealthSouth CEO Scrushy's bribery conviction upheld

Mon Jul 15, 2013 3:46pm EDT
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By Jonathan Stempel

(Reuters) - A federal appeals court on Monday upheld the bribery conviction of HealthSouth Corp (HLS.N: Quote) founder and former Chief Executive Richard Scrushy, rejecting his argument that new evidence of possible juror and judicial bias warranted a new trial.

The 11th U.S. Circuit Court of Appeals let stand Scrushy's 2006 conviction for paying $500,000 to former Alabama Governor Don Siegelman in exchange for a seat on a state hospital board.

Scrushy, 60, had originally been convicted of six criminal counts, but two were thrown out after the U.S. Supreme Court in 2010 narrowed the definition of "honest services" fraud.

He was resentenced in January 2012 to 70 months in prison, a year less than his original sentence, and ended up spending just over five years in federal custody prior to his July 2012 release.

In his appeal, Scrushy argued that his trial judge should have recused himself over conversations with federal marshals that might have raised questions about his impartiality.

He also said he was a victim of "selective prosecution" because others who donated money and got gubernatorial appointments were not prosecuted.

Scrushy also said jurors were biased for having conducted improper research and apparently being infatuated romantically with an FBI agent who sat with prosecutors during the trial.

But a three-judge 11th Circuit panel said there was no abuse of discretion in the trial judge not recusing himself, and that Scrushy waited too long to allege selective prosecution.   Continued...

Richard Scrushy talks to reporters moments before he enters the Hugo L. Black Federal Courthouse in Birmingham, Alabama, May 18, 2005. REUTERS/Julie Hunter