Scrushy claim contradicted

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Friday, April 25, 2003 | 9:54 a.m.

BIRMINGHAM, Ala. -- The interim chairman of HealthSouth Corp. testified against ousted CEO Richard M. Scrushy as a co-founder of the rehabilitation giant became the 11th person agreeing to plead guilty in a huge accounting fraud.

Scrushy was "closely involved in all facets of the company," said Joel C. Gordon, a director since 1996. His testimony Thursday contradicted defense arguments that Scrushy was a mere figurehead who knew little about HealthSouth's finances.

The Securities and Exchange Commission called Gordon to bolster its case against Scrushy, accused by the government of directing a scheme to overstate HealthSouth earnings by some $2.5 billion.

Scrushy's lawyers have claimed his top aide, William T. Owens, engineered the fraud and was demoted by the board because of an attempted "coup" to remove Scrushy.