A federal jury Friday acquitted two former HealthSouth Corp. executives accused in what the government described as a bribery scheme involving a $50 million deal to run a hospital linked to Saudi Arabia’s royal family.
Supporters of Robert Thomson and James Reilly broke into tears and hugged as jurors found them not guilty in a case that grew out of a much larger investigation into accounting fraud at the rehabilitation and medical services chain. The verdict is the first in a criminal trial resulting from the HealthSouth investigation.
In the same courthouse, another jury continued deliberating charges against former CEO Richard Scrushy, accused of directing the $2.7 billion fraud.
“Hallelujah, amen!” Scrushy said outside court after learning of the verdict in the bribery case. “God is good.”
U.S. Attorney Alice Martin had no immediate comment.
Prosecutors claimed Thomson and Reilly agreed to pay kickbacks of $500,000 annually for five years in exchange for HealthSouth receiving the contract to manage a hospital funded by a foundation tied to Saudi royalty.
But jurors sided with the defense, which argued that a doctor who got the money was paid legally under a legitimate consulting agreement. The defense didn’t present any witnesses, instead relying partly on prosecution testimony about the cultural differences in doing business in the United States and Saudi Arabia.
Jurors initially reported being deadlocked, but U.S. District Judge Inge Johnson told them to keep working. In all, the panel deliberated about eight hours over two days after about eight days of testimony and arguments.
Thomson, a former president and chief operating officer of HealthSouth’s inpatient division, and Reilly, a vice president for legal services, were each charged with conspiracy, securities violations and traveling outside the country to commit a crime.
Two other former HealthSouth executives, Thomas Carman and Vincent Nico, pleaded guilty in the Saudi bribery scheme and testified against Thomson and Reilly in a deal with prosecutors.
Thomson and Reilly were tried in a courtroom three floors down from where Scrushy was on trial at the same time. Jurors in Scrushy’s trial began deliberations Thursday.