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Testimony Continues in Scrushy Trial

By Alabama Public Radio

Birmingham, AL – Testimony resumes Friday morning in the federal trial of former HealthSouth CEO and company founder Richard Scrushy. HealthSouth co-founder Aaron Beam testified Thursday that Scrushy instigated a $2.7 billion fraud at the company. Beam is among 15 former HealthSouth executives who have agreed to plead guilty in the fraud. He said that Scrushy demanded that numbers be fixed, so earnings would not fall below Wall Street expectations. But the defense tried to damage Beam's credibility by bringing out during cross-examination that Scrushy never explicitly told him to do anything illegal to hide the earnings shortfall. Meanwhile, an accountant who examined HealthSouth's books for the government also testified Thursday that earnings were inflated from 1996 through 2002. Accountant Harvey Kelley said the false financial statements were not the result of aggressive accounting practices. He said executives just made up numbers.

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