Fines and Prison Sentences for WorldCom

A federal jury on Tuesday, March 15, 2005, found ex-WorldCom CEO Bernard Ebbers guilty on all counts for his role in an $11 billion accounting scandal, delivering a big victory to federal prosecutors.

After eight days of deliberation, the jury found the WorldCom co-founder guilty of one count of conspiracy, one count of securities fraud and seven counts of making false filings with the U.S. Securities and Exchange Commission.

Ebbers, 63, could spend the rest of his life in jail and pay millions of dollars in fines. He's scheduled to be sentenced on June 13, 2005, though Ebbers' lawyer said immediately after the verdict that he would appeal.

The U.S. government spent several years crafting a case to convict the former chief executive, who presided over the biggest corporate scandal in American history.

Ebbers is the most prominent executive to be convicted in a broad federal sweep to investigate a spate of scandals that rocked Wall Street at the end of the late 1990s economic boom.

The accounting revelations plunged WorldCom into bankruptcy and almost destroyed a company whose market value once topped $180 billion.

In its main line of attack, the prosecution relied on testimony from Scott Sullivan, WorldCom's former chief financial officer. Sullivan claimed that Ebbers ordered him to engage in fraud to prevent outsiders from learning about the company's deteriorating financial condition.

Although Sullivan did not provide a "smoking gun" in the form of substantiating documents or corroborating testimony from eyewitnesses, the jury was evidently swayed by a mound of circumstantial evidence.

Ebbers, for his part, insisted he was ignorant about highly technical financial matters and that he relied on Sullivan to provide the expertise. He said he never asked Sullivan to illegally conceal WorldCom's growing expenses and declining sales growth.

The defense also questioned the motives of Sullivan, noting that he only decided to testify against Ebbers after he pled guilty to fraud charges.

Sullivan cooperated with prosecutors in hopes of receiving a lighter sentence. Five other former WorldCom executives also pled guilty to fraud charges.

Prosecutors ridiculed the notion that Ebbers did not know what was going on in the company that he ran for 20 years. They painted Ebbers as a domineering figure who intimidated aides and obsessed about the smallest details, such as how much money the company was paying for coffee.

The government's lead prosecutor also told jurors that Ebbers, who took out more than $400 million in company loans, had the most to lose if WorldCom foundered. The defense responded by noting that Ebbers never sold his WorldCom stock even as it nosedived.

Prosecutors are seeking a sentence of 85 years in prison for former WorldCom Chief Executive Bernard Ebbers, the Wall Street Journal reported on its Web site Tuesday.

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