Ex-HealthSouth CEO Scrushy testifies he doesn’t know where his assets are since he’s in prison

Scrushy: Don’t know where financial assets are now

BIRMINGHAM, Ala. — Faced with a nearly $2.9 billion court judgment, imprisoned HealthSouth Corp. founder Richard Scrushy testified Thursday he didn’t know what happened to his assets small or large, from guns to multimillion-dollar investments.

Dressed in a business suit rather than the uniform he’s worn since being sent to federal prison for bribery, Scrushy said he had no idea what became of the firearms he used to keep at his suburban Birmingham mansion or more than $9 million he made from a stock option sale eight years ago.

“Do you recall what you did with the money? Nine million dollars is a lot of money, Mr. Scrushy,” said attorney John Somerville, representing HealthSouth shareholders trying to collect the verdict.

“I don’t recall what I did with it,” said Scrushy.

An accountant’s records showed Scrushy had $64 million in early 2001, but Scrushy said the document was prepared by an accountant who stole as much as $7 million from him before committing suicide. Besides, Scrushy said, it’s been a long time to remember details.

“I don’t know what I owned back then,” he said, sipping occasionally from a Diet Coke.

Later a federal probation office report was cited, listing Scrushy’s worth in June 2007 as $27.9 million, but Scrushy said that was not accurate. He didn’t say if it was too high or too low, but said his finances had changed because of legal fees and court settlements.

HealthSouth shareholders are trying to seize virtually all of Scrushy’s remaining wealth to collect the $2.9 billion judgment returned in June by Circuit Judge Allwin Horn. The judge said Scrushy was behind the huge accounting scheme that almost drove HealthSouth into bankruptcy.

Horn allowed plaintiff lawyers to question Scrushy under oath after holding the longtime chief executive in contempt of court for failing to disclose his assets earlier.

Scrushy was acquitted on multiple criminal charges in the accounting scheme in 2005, but he was later convicted with former Alabama Gov. Don Siegelman in a bribery conspiracy and sentenced to almost seven years. The $2.9 billion judgment was in a separate civil suit in state court related to the accounting scheme.

Scrushy has been imprisoned in Texas for more than two years, but he was brought back to Birmingham for sworn testimony about the location of his once-massive fortune. The deposition could go on for days.

Authorities already have auctioned Scrushy’s fleet of 19 vehicles for $850,000, and his multimillion-dollar lake estate is set for auction next month. His boats, artwork and furniture all could be sold eventually.

Scrushy — who had a reputation at HealthSouth for displaying an explosive temper whenever challenged — kept his cool through most of his testimony.

“If it’s OK with you, I’d like to do a little research before I answer your question,” he replied when asked whether he made a $1.9 million loan that he said he couldn’t recall.

Scrushy repeatedly said he lacked documents about his finances since he’s imprisoned. He seemed irritated when Somerville asked whether he still lived at his huge estate.

“That’s where all my clothes are,” he said curtly.

Once the largest single owner of HealthSouth stock, Scrushy told Somerville he didn’t know whether he still owned any shares of the rehabilitation chain he founded and ran for years.

“I think it’s all gone,” said Scrushy. “I think the plaintiff attorneys got it.”