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Judge questions Scrushy over gag order

/ Source: The Associated Press

A federal judge ordered Richard Scrushy and his lawyers to appear in court Wednesday and explain why they shouldn't be sanctioned for violating a partial gag order in the criminal case against the fired HealthSouth chief executive.

In a brief document filed Tuesday, U.S. District Judge Karon O. Bowdre said Scrushy, his attorneys and his spokesmen had to explain their actions in light of the order she issued earlier this year.

The judge did not specify what comments might have violated the order. But she scheduled the hearing the same day Scrushy attorney Art Leach was quoted in newspaper articles as saying a new government pleading that implicated Scrushy in the massive fraud at HealthSouth was "based on lies and inconsistencies."

Also, on Sunday, Scrushy was quoted in The Birmingham News criticizing the performance of the current managers of the Birmingham-based HealthSouth rehabilitation chain. The story said Scrushy's comments came in an e-mail to the newspaper.

The judge did not indicate what type of penalties Scrushy or members of the defense team might face if she determines they violated the gag order.

In that order _ which the judge approved in April with the consent of both the defense and prosecutors _ Bowdre barred anyone connected with the case from publicly discussing evidence or possible witnesses before Scrushy's trial begins.

Prosecutors accuse Scrushy of directing a scheme that overstated HealthSouth earnings by more than $2.6 billion to meet Wall Street estimates. He and 19 former HealthSouth workers were charged, with 17 pleading guilty and agreeing to cooperate with prosecutors.

Jury selection is set to begin Jan. 5 in Scrushy's trial on federal fraud and conspiracy charges. Free on $10 million bond, Scrushy pleaded not guilty and blamed everything on former employees.