updated 1/2/2005 6:22:36 PM ET 2005-01-02T23:22:36

HealthSouth’s flashy former CEO — whose lifestyle included racing speed boats and fronting his own country band — stands trial in federal court this week for allegedly conspiring to overstate company profits by $2.6 billion.

Jury selection begins Wednesday in the trial of Richard Scrushy, who has pleaded not guilty to a 58-count indictment accusing him of fraud, conspiracy, perjury and other charges. Opening statements are expected Jan. 18.

If convicted of all charges, Scrushy could be sentenced to up to 450 years in prison and fined more than $30 million.

Prosecutors claim Scrushy, 52, and other senior executives of the rehabilitation giant schemed to inflate HealthSouth earnings from 1996 to 2003 so they would meet Wall Street forecasts and keep stock prices high.

“We are looking forward to presenting the evidence to a jury,” said U.S. Attorney Alice Martin.

U.S. District Judge Karon Bowdre issued a gag order in April and Scrushy’s attorneys would not comment on the start of jury selection. Scrushy has maintained his innocence.

17 HealthSouth execs indicted
Seventeen former HealthSouth executives have been charged and all but Scrushy and a former controller who was indicted last week have pleaded guilty and are cooperating with investigators. All five of HealthSouth’s former chief financial officers reached plea deals and could testify against their former boss, who is free on $10 million bail.

Prosecutors claim the earnings overstatement helped Scrushy earn $267 million in salary, bonuses and stock options from 1996 through 2002 that financed a lavish lifestyle that included private planes, boats, luxury cars, art, jewelry and two coastal mansions. The government is seeking $278 million in assets from Scrushy.

Besides leading his own band in the mid-’90s, Scrushy raced offshore boats and served as a trustee of the University of Alabama at Birmingham. He hobnobbed with athletes and celebrities including Martha Stewart, who was on the guest list in 1997 for Scrushy’s third wedding.

Attorneys must pick 12 jurors and six alternates from a pool of about 600. The trial is expected to last 10 to 12 weeks.

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