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Fraud claims dismissed against ex-HealthSouth CEO

[JURIST] US District Judge Inge P. Johnson of the Northern District of Alabama [official website] on Wednesday dismissed fraud charges against former HealthSouth Corp. [corporate website] CEO, Richard Scrushy [defense website] because the charges were not specific. Johnson will allow prosecutors fifteen days to amend and refile the fraud counts, which have already been filed three times by the US Securities and Exchange Commission (SEC) [official website]. Johnson did not dismiss five other charges against Scrushy, including aiding and abetting in false financial reporting, false record keeping, and failing to maintain proper internal controls at HealthSouth. Scrushy, who was also indicted on charges for bribing [JURIST report] former Alabama Gov. Don Siegelman [official profile] was acquitted [JURIST report] in June on criminal charges for directing a scheme to overstate the earnings of the Birmingham-based medical services chain by $2.7 billion. The SEC, which is seeking $785 million in civil penalties [complaint] against Scrushy, will begin settlement talks with the fired CEO’s lawyers on January 18. AP has more.

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