Former Chief of WorldCom Charged With Making False Filings
nytimes.com
May 24, 2004
By THE ASSOCIATED PRESS
NEW YORK (AP) -- Federal prosecutors brought new charges Monday against former WorldCom CEO Bernard Ebbers, accusing him of falsifying six regulatory filings about the condition of the telecommunications giant.
Ebbers was already facing fraud and conspiracy charges in the collapse of WorldCom, whose $11 billion accounting fraud led to the largest bankruptcy in U.S. history.
Prosecutors had also previously said Ebbers, 62, submitted a falsified Form 10-Q to the Securities and Exchange Commission in November 2000, lying about the financial position of WorldCom.
The new indictment, returned by a federal grand jury, includes six additional charges of falsifying similar SEC forms -- four in 2001 and two in 2002, just before the company collapsed.
A call to Ebbers' lawyer for comment was not immediately returned.
Ebbers is scheduled to go to trial in November. He pleaded not guilty to the original three counts against him -- fraud, conspiracy and the single false SEC filing -- and will now have to enter pleas on the six new charges.
The three original charges carried up to 30 years in prison. The additional six add 60 years to the potential sentence, although any sentence would be drastically reduced under congressional sentencing guidelines.
Federal prosecutors indicted Ebbers in March after the former No. 2 official at WorldCom, chief financial officer Scott Sullivan, agreed to plead guilty and testify against him.
A hearing in the case -- already scheduled before prosecutors announced the new charges -- was set for Tuesday.
Ebbers resigned from WorldCom in April 2002, well after the company's stock price had begun a steady decline but only soon after questions began to swirl about the company's finances.
Two months later, WorldCom announced it had uncovered nearly $4 billion in hidden expenses -- the beginning of a spiral that would become the largest corporate fraud in U.S. history. The fraud is now estimated at $11 billion.
WorldCom filed for bankruptcy July 21, 2002.
A WorldCom report released in June 2003 said Ebbers fostered a poisonous corporate culture and said he was "aware, at a minimum, that WorldCom was meeting revenue expectations through financial gimmickry." |
