Lawyers for former HealthSouth Corp. chief executive Richard Scrushy have filed a motion in U.S. District Court to dismiss the civil charges recently filed by the Securities and Exchange Commission.
Scrushy was acquitted in late June on all of the three dozen counts he faced in connection with a $2.7 billion accounting scandal that inflated earnings at the health care company. The civil suit seeks $786 million in penalties and restitution, and would not allow Scrushy to serve as an officer or director at any public company if found guilty.
Scrushy's lawyers say that prosecutors have not produced any additional information implicating Scrushy, and that there has been no "credible" evidence that Scrushy knew about the fraud. Scrushy is planning to ask HealthSouth to pay more than $20 million in attorney fees, and he also wants to return to the company he founded in some capacity. Shortly after his acquittal on the criminal counts, federal prosecutors dropped their appeal of three perjury counts dismissed at his trial, meaning the civil suit is the last major court battle he could face.
In bringing a civil claim, the SEC most show "a preponderance of the evidence" that Scrushy was involved in and had knowledge of the fraud, a lower burden than the "reasonable doubt" standard required for a criminal conviction.
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