From   http://www.forbes.com/home_europe/2003/05/08/cx_da_0508topnews.html

Richard Scrushy, Still Uncharged, Is Unfrozen

NEW YORK - Innocent until proven guilty is still the norm in American justice, unless, of course, you are an accused drug dealer, terrorist, immigrant who looks like a terrorist or someone accused of murder. In those kinds of cases, many have been locked up before trial or have had their assets frozen. Business executives like <http://www.forbes.com/finance/mktguideapps/personinfo/FromPersonIdPersonTearsheet.jhtml?passedPersonId=217929>Richard Scrushy, the fired chief executive of HealthSouth, are not on this list, so a federal judge in Alabama, exercising the default option, said he can have access to all of his assets as he prepares to defend himself against civil and potential accounting fraud charges that have been swirling around the company he founded in 1984.

Scrushy, who was fired in March, has been accused by the U.S. Securities and Exchange Commission of inflating earnings by $1.4 billion since 1999, and by perhaps $2.5 billion overall. No criminal charges have yet been filed against him and Scrushy's lawyers have sworn his innocence--even as many around him have admitted their guilt. On May 5, Aaron Beam became the fifth former chief financial officer to plead guilty to bank fraud charges. All have said they conspired with Scrushy, in Beam's case to inflate earnings in 1996 and 1997.

The former CEO had asked for at least some of his millions to be unfrozen--the exact amount his lawyers said he needed seems to vary--arguing that he had made that amount before he founded HealthSouth (otc: HLSH - news - people ). Judge Inge P. Johnson of the Northern District of Alabama gave him more than that, giving him access to all his assets, which amount to about $150 million according to the SEC. The judge also suspended the civil fraud case against him until a federal criminal investigation is resolved.

"This court found that the SEC had failed to present sufficient evidence to warrant the issuance of a freeze of defendant Scrushy's assets," Johnson said in her ruling.

Scrushy will now have millions to pay lawyers and taxes. He also says he needs $10 million for living expenses. Even if Scrushy himself is charged criminally and pleads guilty, those lawyers should be busy for years defending him from civil suits brought by stockholders. In the near term, the lawyers will be busy keeping Scrushy out of prison. His likely defense was that he did not know about the fraud committed at his company by so many others.

The forfeiture ruling "was a big victory for Richard Scrushy," said Donald Watkins, a Birmingham, Ala., lawyer who represents him. "We were confident all along that an objective review of the evidence in this case by a fair and impartial judge would result in the unfreezing of his assets. It is our hope that the U.S. attorney's office in Birmingham and Department of Justice in Washington will carefully study the judge's opinion and its ramifications for any criminal investigation that those offices are pursuing."

Judge Johnson ruled that the SEC had not proven both that Scrushy had likely committed the fraud and that failure to freeze his assets would cause irreparable harm. The agency had argued Scrushy hid his money offshore.

The investigation of HealthSouth is a civil and criminal probe into the alleged accounting fraud at the Birmingham, Ala.-based company, which operates rehabilitation clinics and outpatient surgery centers. The SEC is pursuing accounting fraud and insider-trading charges. The Justice Department is leading the criminal investigation, in which the former CFOs have pledged cooperation.

For Scrushy, who cashed in $93 million worth of stock options in 1998 alone, the ruling yesterday will give him money to fight.

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