Ashcroft to Speak on Corporate Crime
Attorney general's address this afternoon follows arrests of former WorldCom executives Scott Sullivan and David Myers.Attorney General John Ashcroft and FBI Director Robert Mueller will speak publicly this afternoon on corporate crime, following the arrests this morning of former WorldCom Inc. executives Scott Sullivan and David Myers for their alleged participation in accounting fraud at the bankrupt telecommunications carrier. Sullivan, former chief financial officer, and Myers, former controller, at the Clinton, Miss., company, turned themselves in at the U.S. Attorneys Office for the Southern District of New York in Manhattan, according to a Department of Justice spokesman in Washington. They are expected to be held until a court appearance is scheduled, the spokesman said. According to a complaint filed in the southern district of New York, Sullivan and Myers are charged with conspiracy to commit securities fraud, including making false statements to auditors and to the U.S. Securities and Exchange Commission. Specifically, they are charged with having transferred approximately $3.8 billion in line cost expenses to capital expenditures on the companys balance sheet.
The complaint charges that after WorldComs expenses began to increase as a percentage of revenue in the summer of 2000, Sullivan "devised a scheme to hide WorldComs increasing expenses by causing substantial portions of WorldComs line costs to be transferred from WorldComs income statement into its capital expenditure accounts." The complaint also claims that Sullivan instructed Myers to direct other WorldCom employees to make the accounting transfers.