Thursday, December 30, 2004

A New Indictment Related to HealthSouth Just Days Before the Scrushy Trial Begins

A key HealthSouth Corp. prosecution is soon to begin. According to a Media Advisory of the U.S. Courts, "[o]pening statements in U.S. v. Richard Scrushy are scheduled to begin Tuesday, January 18 at 9:00 a.m in . . . Birmingham, Alabama. A 58-count indictment charges the former CEO of HealthSouth Corp. with securities fraud, among other crimes." But with just days to go before starting this trial, prosecutors have not stopped indicting people.

Bloomberg News (per the NY Times)  reports this a.m. in an article titled "Fraud Indictment in HealthSouth Case," that " [a] former controller of HealthSouth, Hannibal Sonny Crumpler, was indicted by a grand jury yesterday, accused of participating in a $2.7 billion fraud at the company, according to a federal prosecutor." According to this article the indictment has charges of mail, wire, and securities fraud.  Crumpler's attorney, Michael Abbott responds that his client" never knowingly engaged or participated in any fraud relating to the HealthSouth investigation."

With the trial of Scrushy so close to opening,  one has to wonder several things about this new indictment.  Is it something that arose as a result of the government preparation for trial or just part of their continuing investigation into HealthSouth? Is the government hoping to obtain a new witness for the trial? Is the government hoping to keep this individual from testifying for the defense?   The indictment of a new individual just days before a major trial can in some instances present a challenge to the defense. Whether that will be the case here remains to be seen.


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