Thursday, February 3, 2005

Scrushy Trial Excitement- Rolling Admissions

It sounds like a rolling admission process, only the recipients have not applied to enter the group and would only wish they could decline acceptance into the indicted club.  The United States Attorneys Office for the Northern District of Alabama indicted James P. Bennett  - and yes, right in the middle of  Richard Scrushy's trial. (See  release of the USA's office)  (See also the AP story in the Atlanta Journal Constitution and check out the status of the Scrushy trial on the Birmingham News site.)

Bennett, the former HealthSouth corporation president (see employment contract between Bennett and HealthSouth), has been indicted for "conspiracy, securities fraud, insider trading, and money laundering in connection with the $2.64 billion accounting fraud that occurred at HealthSouth Corporation." (DOJ Press Release). The conspiracy count is premised on mail fraud, wire fraud, and securities fraud and from the DOJ press release it sounds like one count is for false statements.  The indictment, according to the DOJ press release also seeks "forfeiture of approximately $28,133,000."

This is a perfect example of a difference in the way prosecutions occur in the white collar and street crime setting.  In street crime cases, the individuals most often are indicted and then proceed to trial as a group.  In a white collar case, however, prosecutors often move more slowly and an indictment in the middle of the trial can therefore occur. 

But this certainly can put a damper on defense strategy.  Why? 1) In some cases, it means that a witness who might have planned to testify for the defense will no longer be available as they may be concerned about something being used against them at their own trial. 2) A mid trial prosecution of a new individual can also cause the defense to change its strategy, especially if they planned to argue that the government was not proceeding against the most culpable player.

Other than a possible strategic benefit, why would the government indict someone close to a case in the middle of another trial? 1) In some situations this could mean that the government acquired new information as a result of the pending trial.  The new information might allow them to now proceed against this other party. 2)Or maybe the new defendant was frightened by the trial and suddenly decided to talk and the indictment will be followed by a plea agreement 3)Or maybe the individual on trial decided to cooperate after finding the evidence against them incredibly damaging and this new indictment comes from this conversation.

There is a downside to the government in waiting to charge a codefendant, especially when there is a conspiracy charge.  By not having a joint trial, the available evidence may be limited to just what happened with regard to this one person and any unindicted co-conspirators.    A sooner indictment could mean that the individuals are all tried in unison.

So what happened here? Will it affect the trial of Richard Srushy and will it help or hurt the government's case?


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