A Medical Device Daily

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 the 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.

In other legalities,Alphatec Holdings (Carlsbad, Cal-ifornia), a developer of spine fusion solutions, reported a settlement with Benchmark Medical Holdings that relieves both parties of all obligations related to prior severance and promissory note agreements between Benchmark and certain Alphatec employees who were previously employees of Benchmark. The agreement also settles litigation brought by Alphatec and Benchmark against one another related to these matters.

Alphatec said it also has learned that on June 26, Biedermann Motech (Schwennigen, Germany) and Depuy Spine (Raynham, Massachusetts) filed suit for patent infringement against it and a number of companies, relating to U.S. Patent No. 5,207,678. Biedermann Motech owns the patent and DePuy is the exclusive licensee of the patent.

Alphatec said in a statement that it does not believe that “any of its products infringe on this patent” and will vigorously defend against the suit.

Alphatec's principal product is focused on the estimated $2.2 billion U.S. spine fusion market through its wholly-owned subsidiary, Alphatec Spine (also Carlsbad,), and includes a variety of spinal implant products and systems comprised of components such as spine screws, spinal spacers and plates. Alphatec also participates in the Japanese spine fusion and orthopedic trauma markets through a subsidiary.