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Spokane, Washington  Est. May 19, 1883

Scrushy jury asks about possible deadlock

Jay Reeves Associated Press

BIRMINGHAM, Ala. — Jurors deliberating the fraud case against fired HealthSouth Corp. CEO Richard Scrushy asked about the possibility of a deadlock Friday in only their second day of talks.

The question came in a handwritten note delivered to U.S. District Judge Karon Bowdre moments after the jury arrived to start the day. They adjourned 5 1/2 hours later without a verdict and will return Monday to resume work.

The jury requested clarification of a key conspiracy charge against Scrushy, and asked: “If we cannot decide unanimously one way or another, what happens.”

Jurors must answer as many as 52 separate questions to decide the conspiracy count, one of 36 they are to review in the first phase of deliberations.

After consulting with both sides, Bowdre told the panel she was “confident that with some more discussion you can reach a verdict.”

The judge’s comments came during a hearing where jurors listened to clandestine FBI recordings of Scrushy, accused of leading a $2.7 billion earnings overstatement at HealthSouth. The jury asked to hear the recordings shortly after deliberations began Thursday.

Outside court, prosecutor Richard Smith said “you can’t read anything” into the jury’s note about a possible deadlock.

“They’re asking the right questions. They’re on the right track,” he said.

One of the four FBI recordings played for jurors showed that Scrushy badly misjudged the scope of a federal investigation into the corporation.

Scrushy is the first CEO charged under the Sarbanes-Oxley corporate reporting law for allegedly directing a $2.7 billion earnings overstatement at HealthSouth. He also is accused of fraud, false reporting to the Securities and Exchange Commission and money laundering.

Scrushy, 52, faces the equivalent of a life sentence if convicted, plus millions of dollars in fines and the forfeiture of as much as $278 million in assets. The exact range of his possible punishment is unclear because of uncertainty in federal sentencing rules.