Scrushy Jury Deadlocked, Must Keep Working

Jurors in the trial of former HealthSouth (search) CEO Richard Scrushy (search) said Friday they were deadlocked on all charges related to the company's $2.7 billion earnings overstatement, but the presiding judge ordered them to continue deliberations.

The deadlocked jury's apparent willingness to give up, coming after more than two weeks of fruitless consideration, raised speculation that the U.S. government's case against Scrushy had unraveled and would eventually end in a mistrial.

"We regret to inform the court that after many days of deliberating we were unable to reach a verdict of either guilty or not guilty of any/all counts," the jury said in a note to U.S. District Judge Karon Bowdre.

Bowdre could eventually declare a mistrial if she concludes there is no hope the jury can reach a verdict. But Friday she issued a so-called "Allen charge," ordering jurors to work harder to break the impasse.

"If you should fail to agree on a verdict, the case is left open and must be tried again," she said before sending them back into a jury room in the federal court in Birmingham, Alabama, where Scrushy is being tried.

"I have no reason to believe that the case can be tried again better or more thoroughly than it has been tried before you," Bowdre said. A number of jurors were somber as they retreated to continue their 10th day of deliberations.

Scrushy is the first CEO charged with violating the 2002 Sarbanes-Oxley Act (search), the corporate reform law passed by Congress requiring, among other things, that chief executives certify the accuracy of their financial statements.

The U.S. government accused the flamboyant multimillionaire of directing a $2.7 billion accounting fraud at the medical rehabilitation company in a bid to inflate its profits and enrich himselg case, they have become increasingly silent amid growing signs of confusion and division among the seven male and five female jurors and talk of a possible mistrial.

The jury has asked Judge Bowdre for help with the case more than half a dozen times since deliberations began May 19.

Besides the conspiracy count, Scrushy faced multiple counts of mail and wire fraud, money laundering and other wrongdoing in connection with a scheme to inflate the company's earnings and allegedly enrich himself between 1996 and 2002.

Scrushy did so before stepping down in 2002 as CEO of HealthSouth, which he had built into the nation's largest chain of rehabilitation and outpatient surgery clinics. He was ousted as the company's chairman the following year.

If convicted, the 52-year-old Alabama native could spend the rest of his life in prison.

The government said Scrushy, who hosts a religion-inspired television show and regularly preaches in Christian churches in this Bible-Belt city, directed the fraud to inflate the value of his stock options and fund an extravagant lifestyle. He sold more than $200 million worth of stock.

Scrushy's defense team has admitted it wanted as many religious believers as possible sitting on the jury.

Tales of his lavish spending have outraged many HealthSouth investors, who saw the Birmingham-based company's stock plummet from a high of $30.56 a share in 1998 to 8 cents a share shortly after the fraud came to light in 2003.

Defense lawyers have portrayed Scrushy as an unknowing victim of a scheme by other HealthSouth executives who agreed to testify for the prosecution to avoid harsh prison terms.

Fifteen former HealthSouth officials have pleaded guilty to charges related to the fraud. Scrushy did not testify at his trial.

Reuters and the Associated Press contributed to this report.