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Ebbers
guilty in $llbn fraud trial
Former WorldCom chief faces 20-year sentence
By Joshua Chaff in and Kevin Allison in New York
Bernie Ebbers,
the former WorldCom chief executive, was found guilty yesterday of leading
an $11bn (£5.75bn) accounting fraud that pushed the once high-flying
telecommunications group into the largest bankruptcy in US history.
On their eighth day of deliberation, a New York jury convicted Mr Ebbers,
63, of securities fraud, conspiracy and seven counts of filing false information
with regulators. He faces more than 20 years in prison when he is sentenced
in June.
The verdict marked a stunning turn for Mr Ebbers, who rose from humble
roots as a basketball coach in Mississippi to assemble one of the largest
telecoms companies in the world and become a celebrity of the 1990s stock
market boom.
It also marked a high point for prosecutors in their highly publicised
crackdown on white-collar crime following a series of scandals that first
erupted just over three years ago, bruising investor confidence and ushering
an era of corporate reform.
Some lawyers argued that the trial's outcome could re-establish standards
of corporate responsibility for chief executives, because jurors rejected
Mr Ebbers' defence that he was unaware of criminal activities at WorldCom
in spite of serving as its chief executive.
If so, the case could have implications for the forthcoming trial of Ken
Lay and Jeffrey Skilling, respectively former chairman and chief executive
of Enron.
Alberto Gonzales, US attorney general, called the verdict "a triumph"
for the legal system and President George W. Bush's corporate fraud taskforce.
Mr Ebbers left the courthouse with his family following the verdict, declining
to comment.
Reid Weingarten, his lawyer, challenged the jury's decision, saying: "We
continue to believe there's not one chance in the world that he participated
in any fraud or cooking of the books at WorldCom."
Mr Weingarten cited the judge's refusal to grant immunity to three former
WorldCom employees so that they could testify on his client's behalf as
a promising ground for appeal.
The five-week trial charted the rise and fall of WorldCom in the era of
telecoms deregulation.
Under Mr Ebbers, the start-up grew into a global colossus through a series
of mergers.
However, former executives testified that the company's fortunes began
to sour after the internet bubble burst in 2000, and several of its customers
failed.
Scott Sullivan, WorldCom's former chief financial officer and the government's
star witness, recounted that he began to manipulate the company's accounts
in late 2000 to hide mounting network expenses and satisfy Wall Street's
earnings expectations.
Mr Sullivan, who had already pleaded guilty, told jurors that he had warned
Mr Ebbers in private meetings that the company's accounting was improper,
but was repeatedly ordered to "hit the numbers”.
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