Fraud case: Ex-WorldCom chief guilty
Former WorldCom Inc Chief Executive Bernard Ebbers has been found guilty of orchestrating an $11 billion accounting scandal that drove the company into bankruptcy.
Ebbers, a one-time milkman, turned WorldCom, an obscure long-distance phone carrier, into a telecommu-nications giant.
The federal jury in New York returned its verdict on the eighth day of deliberations on Tuesday, convicting the 63-year-old Ebbers of fraud, conspiracy and filing false documents with securities regulators. He is set to be sentenced on 13 June and faces up to 85 years in prison.
The tall, bearded Ebbers, who worked as a coach, bouncer and milkman before getting into the telecommunications business, sat with his hands folded as the verdict was read and showed little reaction. He then turned to hug his wife, Christy, who was crying.
“We profoundly disagree with the verdict,” Reid Weingarten, the lead attorney for Ebbers, said, promising to appeal against the conviction. “The fight will continue.”
Major victory
Ebbers declined to comment after the verdict, which was viewed as a major victory for federal prosecutors and corporate governance reformists.
Ebbers spent two days on the witness stand defending himself against charges that he masterminded an accounting fraud at the worldwide telecommunications giant he transformed through a series of takeovers beginning in the early 1980s.
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Ebbers denied he masterminded |
Along the way, Ebbers became widely regarded as a savvy entrepreneur and maverick, cementing his reputation in 1998 with the $40 billion purchase of MCI Communications Corp, the largest acquisition in corporate history at the time.
WorldCom’s finances and popularity began to deteriorate, however, as the dot-com bubble burst and growth of the telecommunications industry slowed.
By late 2000, WorldCom accountants began making false entries to hide the financial problems from investors and the public.
Innocence claimed
Ebbers has maintained he was unaware of the fraud. He told the jury of seven women and five men he would have put a stop to it had he known it was occurring.
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“We profoundly disagree with the verdict. The fight will continue” Reid Weingarten, |
Instead, he said, he was kept in the dark about the financial tricks used by Chief Financial Officer Scott Sullivan, one of six WorldCom executives indicted when investigators uncovered the $11 billion scandal in 2002.
Sullivan, like all of the executives except Ebbers, pleaded guilty to fraud and agreed to cooperate with prosecutors.
He emerged as the government’s star witness, testifying that he warned Ebbers that the only way the company could meet its earnings projections would be to make “adjustments” to the financial statements.