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Ex-HealthSouth CEO Scrushy indicted
Company founder, along with ex-Alabama governor and two others, accused in fraud case.
October 26, 2005: 10:10 PM EDT
Ex-HealthSouth CEO Richard Scrushy
Ex-HealthSouth CEO Richard Scrushy

ATLANTA (CNN) - Former Alabama Gov. Don Siegelman and former HealthSouth CEO Richard Scrushy, who was acquitted in June in a massive corporate fraud case, were indicted Wednesday on federal charges stemming from an investigation into allegations of public corruption during Siegelman's administration.

The indictment alleges Siegelman -- who was governor of Alabama from 1999 to 2003 and has announced he will try to make a comeback in 2006 -- and his former chief of staff, Paul Michael Hamrick, conspired with others to establish a criminal enterprise in which official actions were exchanged for hundreds of thousands of dollars of bribes from business interests, including Scrushy.

"A few obsessed government officials have spent millions of dollars of taxpayers' money in an attempt to control a governor's election," Siegelman said. "The people of Alabama aren't going to let that happen, and I'm not going to let it happen."

According to the indictment, Scrushy, then head of Birmingham-based HealthSouth, made two disguised payments to Siegelman totaling $500,000 in exchange for an appointment to a medical review board. He was charged with bribery and mail fraud.

Hamrick and Gary Mack Roberts, the former head of the Alabama Department of Transportation, were also named in the 30-count indictment handed down in Montgomery, Ala.

In June, after six weeks of deliberation, a federal jury in Birmingham surprised courtroom observers -- and shocked prosecutors -- by acquitting Scrushy on 36 counts related to a $2.7 billion accounting fraud at HealthSouth, the hospital chain he founded.

He was the first chief executive charged under the 2002 Sarbanes-Oxley act, a corporate reform measure passed by Congress after a wave of corporate scandals.

Prosecutors said Scrushy masterminded the scheme, but his lawyers maintained other HealthSouth executives committed the fraud behind his back.

The charges leveled against Scrushy Wednesday were unrelated to the earlier case.

Earlier charges tossed

Last year, Siegelman was charged, along with Hamrick, with conspiracy and health-care fraud for allegedly scheming to rig the bidding process for Medicaid contracts. Those charges were out by tossed by a federal judge at the start of their trial.

The former Democratic governor announced last month that he would run for the state's top post again in 2006, setting up a possible rematch with Republican Gov. Bob Riley, who ousted Siegelman in a highly contested race in 2002.

Siegelman and Hamrick were charged with racketeering conspiracy, including extortion, fraud, money laundering and obstruction of justice, and mail fraud. The former governor was charged with additional counts of bribery, mail fraud and extortion.

Prosecutors allege Siegelman allegedly demanded payments of as much as $250,000 from individuals under the threat of harming their business interests.

Roberts was charged with mail and wire fraud for his alleged role in influencing Department of Transportation decisions to benefit the interests of businessman Jimmy Lynn Allen in road construction contracts.

Three other individuals have pleaded guilty to public corruption in connection with the investigation, including businessman Clayton "Lanny" Young; Nick Bailey, a former state official; and William Curtis Kirsch, an architect.

The indictment alleges Siegelman and Hamrick took bribes from Young to help his business interests.

Federal prosecutors said the racketeering and conspiracy charges carry penalties of up to 20 years and a fine of $250,000. The bribery charges carry maximum penalties of 10 years in prison, and the obstruction of justice charges carry maximum penalties of 10 years in prison, prosecutors said.  Top of page

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