Ebbers Faces Prison After Fraud Conviction

By Caron Carlson  |  Posted 2005-03-21
Ex-WorldCom CEO Bernard Ebbers was convicted last week on charges of conspiracy, securities fraud and false filings with the Securities and Exchange Commission. Ebbers, who faces up to 85 years in prison, is scheduled for sentencing in June.

Ebbers is among several WorldCom executives who committed the largest accounting fraud in U.S. history, mainly by misallocating billions of dollars in costs. His attorneys argued he was unaware of the fraud at the time it occurred, but Scott Sullivan, former WorldCom chief financial officer, testified that he had informed Ebbers about bookkeeping shortcuts. Sullivan and three other former WorldCom executives pleaded guilty to fraud.

Ebbers built what became the nations second-largest long-distance carrier from a small reseller known as LDDS. He acquired MCI Communications in 1998 and merged it with the operation then known as WorldCom.

Ebbers resigned in April 2002, two months before WorldCom began to disclose the accounting errors, which eventually came to approximately $11 billion. In July 2002, the company entered the largest bankruptcy filing in U.S. history.

The carrier relocated its headquarters to Ashburn, Va., and changed its name to MCI Inc. This year, Verizon Communications agreed to buy MCI for $5.3 billion in cash and equity.

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