Lawyers picked a predominantly black, mostly male jury Monday for the federal fraud trial of fired HealthSouth CEO Richard Scrushy, accused in a more than $2.6 billion conspiracy that prosecutors claim financed a lavish lifestyle of mansions, cars and boats.
A jury of 12 members and six alternates was chosen in a courtroom closed to the public, with news media observing on closed-circuit television, so the panel’s exact composition was not known. But at least 10 blacks and 10 men were on the 18-member panel.
U.S. District Judge Karon Bowdre told the jurors to return Tuesday for opening statements in a trial she previously said could last as long as four months.
Defense lawyer Jim Parkman said he would tell jurors that Scrushy is innocent of prosecutors’ claims that he led a conspiracy to overstate earnings by some $2.64 billion from 1996 to 2002 at the giant rehabilitation chain.
Scrushy, 52, was named in a 58-count indictment accusing him of fraud, conspiracy, obstruction of justice, perjury, money laundering and false corporate reporting in the first test of the 2002 Sarbanes-Oxley Act. Prosecutors are seeking $278 million in personal assets, including waterfront homes, luxury cars and a yacht, as well as a prison sentence that could amount to life if convicted.
The majority black jury is viewed as a possible advantage for Scrushy, who is white but has attended a mostly black church since coming under investigation. He and his wife also host a TV talk show that frequently features black ministers discussing the Bible, and his lead attorney is a prominent black lawyer, Donald Watkins, who has tried to become the first black owner of a major league baseball team.
“It would appear from the outside that it has been Scrushy’s attempt to make this case break along racial lines,” said former federal prosecutor Don Cochran, who now teaches law at Samford University in Birmingham. “But I don’t know that it’s going to be successful. I don’t think you can predict how this jury is going to go.”
Of the blacks on the jury, at least four are men with military experience, a factor Cochran said often is favorable to the government.
U.S. Attorney Alice Martin declined comment on the makeup of the jury, pulled from three predominantly white counties around Birmingham, HealthSouth’s home.
As the jury was picked, Scrushy’s lawyers asked the judge to bar testimony about investor losses in the massive accounting scandal. A court in a related case previously sided with prosecutors who argued the fraud cost stockholders some $328 million.
In a document filed late Sunday, the defense said it will not contest whether the fraud took place, so jurors don’t need to hear about the losses. Instead, it will try to show that other executives pulled off the conspiracy by purposely hiding it from Scrushy, HealthSouth’s primary founder in 1984.
“The only real issue for the jury to decide is whether or not Richard Scrushy was a knowing participant in the scheme to defraud,” the defense said.
The defense said it expected prosecutors to present testimony by all five of HealthSouth’s chief financial officers under Scrushy, with each claiming they had “direct conversations” with Scrushy about the scheme.