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Scrushy Jury May Deadlock

By TChris, Section Crime in the News
Posted on Sat Jun 04, 2005 at 09:09:49 AM EST
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by TChris

In a country so deeply divided, it's surprising that relatively few trials end with a hung jury. Twelve people in a locked room will generally agree on a verdict. Sometimes they struggle; sometimes deliberations become a contest of wills. Recalcitrant jurors usually surrender at some point, if only because they don't know how long the judge will otherwise force them to stare at each other in the locked room.

Occasionally, differences are irreconcilable, wills are equally strong, and unanimous agreement cannot be won. That may be the result in the government's first Sarbanes-Oxley prosecution.

Federal prosecutors Friday appeared on the verge of a serious setback in their landmark fraud case against Richard M. Scrushy, perhaps Alabama's best-known businessman, as jurors in Birmingham told the judge they were badly deadlocked on all charges.

Scrushy's apparent good fortune may be the product of a public relations strategy tailored to Bible Belt jurors.

Since his ouster from HealthSouth Corp. in 2003, Scrushy has launched a Bible-study show on local TV, tied himself to an African American evangelical church and, through a defense lawyer, invoked civil rights imagery while insisting that he is being persecuted by authorities.

The jury announced its deadlock ten days into deliberations. Jurors said they couldn't reach agreement on any of the 36 counts. Judge Karon Bowdre gave the jury the inevitable Allen charge, an instruction to "try again" that many view as coercing jurors to surrender their true convictions for the sake of returning a verdict.

"This trial has involved great time and exceptional effort by both the government and the defendant," Bowdre told the jury. "I have no reason to believe either side could produce more or better evidence in a new trial."

The jurors will resume their staring match on Monday.

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    Scrushy Jury May Deadlock | 3 comments (3 topical)
    Re: Scrushy Jury May Deadlock (none / 0) (#1)
    by Randinho on Sat Dec 17, 2005 at 12:59:41 PM EST
    I know very little about Scrushy (other than his appearance on 60 Minutes in which he blamed his CFO's for everything), but if he signed the annual reports after Sarbanes-Oxley went into effect, what is his affirmative defense?

    Re: Scrushy Jury May Deadlock (none / 0) (#2)
    by Talkleft Visitor on Sat Dec 17, 2005 at 12:59:42 PM EST
    Randy Paul, The article linked in the post carries on the theme that he was not responsible, "Scrushy, 52, contends that the fraud was perpetrated by his subordinates without his knowledge, and that those individuals — 15 of whom have pleaded guilty — are trying to blame him in hope of avoiding jail." He appears to be saying he didn't know about the fraud, so he shouldn't be criminally liable for it. Recall that he attempted to have the certification requirements of SOX overturned. IIRC that attempt was not successful, but he may not have received the memo. I think you have it right when note that he signed the certifications, it really doesn't matter. It's his job to know, and as a public company accountant, I am sick and tired of hearing these people who get millions of dollars a year for supervising the accountants say they had no idea what the accountants were doing. That's their freaking job!

    Re: Scrushy Jury May Deadlock (none / 0) (#3)
    by Talkleft Visitor on Sat Dec 17, 2005 at 12:59:42 PM EST
    I pulled the complaint off of the SEC's website, go here The scheme was convoluted, they knew what the earnings "should" be and then made multiple entries, under the auditors' materiality threshold (how did they know what that was?) as additions to fixed assets, and reductions of the "contractual adjustments" revenue account (this is an accrual of writeoffs of denied insurance billings). I buy that he may not have understood the mechanics of the fraud, I don't buy that he shouldn't have been able to detect the fraud. And, if you read it, the allegation is that he'd look at the preliminary earnings, tell the accountants they were not acceptable, and to go "fix it". Then you get to the swearing match, which it appears that Scrushy has won. That is too bad, because I feel that the demand to go "fix it" (earnings, capital, whatever) happens quite frequently, and the CEO needs to have some culpability for the fraud that results when they put that pressure on the accountants. [Ed. links must be in html format or they skew the site. We fixed this one, thanks.]

    Scrushy Jury May Deadlock | 3 comments (3 topical)