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Scrushy fraud trial continues



Published: Fri, January 28, 2005 @ 12:00 a.m.



BIRMINGHAM, Ala. (AP) -- A key witness against Richard Scrushy testified Thursday the fired HealthSouth CEO never told him to break the law at the start of a huge fraud, and that FBI agents were "pressing" him for figures about the scam after he went to investigators.

But Aaron Beam -- a founder and the first chief financial officer of the rehabilitation giant -- mostly stuck by his claim that Scrushy was the catalyst of the more than $2.6 billion scheme.

Beam spent parts of three days on the stand at the start of Scrushy's trial in what prosecutors and the defense agree was a massive accounting scandal. The question is Scrushy's role in the fraud, which the defense contends was hidden from him by years of lies from subordinates.

Under intense cross examination from defense lawyer Jim Parkman, Beam said Scrushy never explicitly told him to do anything illegal to add revenues and hide an earnings shortfall about nine years ago.

"[He] didn't use the word unlawful," Beam said.

Scrushy, 52, is charged with conspiracy, fraud, obstruction of justice, perjury, money laundering and false corporate reporting in the first test of the 2002 Sarbanes-Oxley Act.




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