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HealthSouth’s Scrushy Loses Bid for Early Release

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Sept. 1 (Bloomberg) -- Richard Scrushy, the HealthSouth Corp. founder sent to prison in 2007 for bribery and mail fraud, lost a bid to be released on bond pending a federal appeals court review of his conviction.

The 11th U.S. Circuit Court of Appeals denied the motion yesterday, according to the case docket posted on the Atlanta court’s website. Scrushy asked for the early release in July, after the U.S. Supreme Court asked the Atlanta court to review its decision upholding his conviction.

Scrushy is serving a term of 6 years and 10 months for bribery after a jury convicted him in 2006 of giving Alabama Governor Don Siegelman a $500,000 campaign contribution in exchange for a seat on a state hospital regulatory board. He was acquitted in 2005 on criminal charges of directing an accounting fraud.

“There is no risk of flight,” Scrushy’s lawyer Arthur Leach argued in the court papers in July. “The only place Scrushy has to go is home to his wife and children.”

Leach didn’t return a call for comment today.

Scrushy’s conviction is under reconsideration after a decision by the U.S. Supreme Court in June in the case of former Enron Corp. Chief Executive Officer Jeffrey Skilling. The appeal involves the high Court’s interpretation of schemes to “deprive another of the intangible right to honest services.”

In the Skilling case, the Supreme Court cut back the honest services law, saying it could be applied only in cases involving bribery or kickbacks. Scrushy and Siegelman were convicted of bribery and honest services fraud. The Supreme Court asked the 11th Circuit to review a ruling upholding their convictions in light of the Skilling decision.

The case is U.S. v. Siegelman, 07-13163-B, 11th U.S. Circuit Court of Appeals (Atlanta). The lower-court case is U.S. v. Scrushy, 05-cr-119, U.S. District Court, Middle District of Alabama (Montgomery).

To contact the reporter on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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