A Diagnostics & Imaging Week

Richard Scrushy, former CEO of HealthSouth (Birmingham, Alabama), last week was found guilty – along with former Alabama Gov. Don Siegelman – of bribery charges.

Scrushy, acquitted last year of heading up massive accounting fraud at HealthSouth, was convicted of making two payments to Siegelman, totaling $500,000, in exchange for an appointment to a medical review board.

Siegelman was convicted of bribery, conspiracy, mail fraud and obstruction of justice, but acquitted of numerous other counts, including racketeering and extortion. His former chief of staff, Paul Hamrick, and former Transportation Director Mack Roberts were acquitted in the same case. Siegelman said Scrushy had contributed to a fund he set up to finance his unsuccessful effort to establish a state lottery in 1999, and he denied that those payments were tied to the board appointment.

Both men denied the fraud activities and promised appeal of their convictions.

Prosecutors said Siegelman established a criminal enterprise in which official actions were exchanged for hundreds of thousands of dollars of bribes from business interests, demanding payments of as much as $250,000 from individuals under the threat of harming their businesses.

Last June, after six weeks of deliberation, a federal jury in Birmingham acquitted Scrushy on 36 counts related to a $2.7 billion accounting fraud at HealthSouth, the hospital chain he founded. He was the first chief executive charged under the 2002 Sarbanes-Oxley act, a corporate reform measure passed by Congress after a wave of corporate scandals.

Prosecutors said Scrushy masterminded the scheme, but his lawyers maintained other HealthSouth executives committed the fraud behind his back.

AngioDynamics (Queensbury, New York) reported that the summary judgment hearing in the patent litigation vs. Diomed (Andover, Massachusetts) in the federal district court in Massachusetts has been postponed due to an order of recusal by Judge Richard Stearns.

Eamonn Hobbs, president and CEO of AngioDynamics, expressed disappointment in the delay, saying: "We have the highest respect for Judge Stearns and how he has handled the case to date. Nevertheless, given the importance of expert testimony in this matter, we expressed our concerns about his being treated by Diomed's expert with apparently the very procedure at issue in the case.

"We were ultimately comfortable leaving the recusal decision in Judge Stearns' hands and respect his decision to recuse himself under these unusual circumstances," he said. "We remain confident in our positions on non-infringement, invalidity and unenforceability and look forward to the case being finally resolved by the court."

In January 2004, Diomed, a subsidiary of Diomed Holdings, filed a lawsuit against AngioDynamics, alleging patent infringement related to AngioDynamics' VenaCure product line, a laser system used for the endovascular treatment of varicose veins and involving U.S. patent No. 6,398,777.

A hearing of the parties' respective summary judgment motions was scheduled for June 1. That hearing was postponed by the court while all parties responded to an order of the court dated May 22, wherein Judge Stearns indicated he recently had been referred to and consulted with a physician concerning a proposed laser treatment.

Although AngioDynamics said it did not request the judge's recusal, he issued that order and said, "I recognize that a reasonable person (perhaps depending on my ultimate rulings) might harbor doubts about my impartiality. Consequently, I will recuse myself and order that the case be transferred to another judge."

AngioDynamics said that the change would delay resolution of the case "by at least several months."