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WorldCom Bernard Ebbers goes to jail.
WorldCom Bankruptcy. More than 11 Billion in shareholders money up in smoke.... That's gotta be depressing. And they say he should be let off because he was a good man ?? o.O
Quote:
NEW YORK — Bernard Ebbers, who as the once-swaggering CEO of WorldCom oversaw the largest corporate fraud in U.S. history, wept in court Wednesday when a judge sentenced him to 25 years in prison — the toughest sentence yet in the string of recent corporate scandals.
Ebbers, now 63, would go to prison in October and not be eligible for release until he was 85. The sentence was handed down by Judge Barbara Jones of U.S. District Court in Manhattan three years after WorldCom collapsed in an $11 billion accounting fraud, wiping out billions of investor dollars.
"I find that a sentence of anything less would not reflect the seriousness of this crime,'' Jones said.
Ebbers sniffled audibly and dabbed at his eyes with a white tissue as he was sentenced. He did not address the court. His wife, Kristie Ebbers, cried quietly. Later, the two embraced as the courtroom emptied.
Jones ordered Ebbers to report to prison on Oct. 12. She said she would recommend Ebbers be designated to the federal prison in Yazoo City, Miss., close to his home.
The judge said she would accept written arguments from the lawyers on whether Ebbers should be allowed to remain free while he appeals the verdict.
Even if Ebbers began doing time in October and got a possible 15 percent reduction in his sentence for good behavior, he would serve at least until early 2027, when he would be 85 years old.
Gino Cavallo, a longtime WorldCom employee who said he lost tens of thousands of dollars in retirement savings because of the fraud, attended the sentencing and said he was satisfied.
"The man's 63,'' Cavallo said. "He's going to die in jail. How much sterner could you get?''
Defense lawyer Reid Weingarten had asked for leniency, mentioning Ebbers' heart condition and his charitable works, cited repeatedly in 169 letters sent to the judge. He described Ebbers as "a modest man'' and an angel to many desperate charitable causes.
"If you live 60-some-odd years, if you have an unblemished record, if you have endless numbers of people who attest to your goodness, doesn't that count? Doesn't that count particularly on this day?'' Weingarten said.
The judge said she did not believe his heart condition was serious enough to warrant a lesser sentence.
At the sentencing hearing, Henry J. Bruen Jr., 37, a former WorldCom salesman, told the court the company's collapse caused "untold human carnage'' and put him through "sheer hell.'' He lost all of his savings and couldn't get another sales job.
Ebbers is the first of six former WorldCom executives and accountants facing sentencing this summer. The other five all pleaded guilty and agreed to cooperate against their former boss.
The sentencing was part of a devastating week for Ebbers, once known as the Telecom Cowboy, who presided over WorldCom's growth in the late 1990s.
His sentence was a decade longer than the 15-year sentence imposed last month on Adelphia Communications Corp. founder John Rigas, 80, for his role in the fraud at the cable TV company. Rigas' son, Timothy, 48, the former chief financial officer at Adelphia, was sentenced to 20 years in prison in that case.
On Ebbers' way into the courthouse Wednesday, photographers and cameramen crowded in front of him, and he reached out and pushed one of them out of the way.
On Tuesday, the judge denied Ebbers' bid for a new trial — a ruling in which she cited "strong'' evidence supporting the conviction, including government witnesses who "outlined the fraud in painstaking detail.''
On Monday, another judge gave her blessing to a settlement under which Ebbers must forfeit almost all his personal assets, including $5 million cash up front, to resolve a shareholder lawsuit.
That settlement will leave Ebbers' wife with about $50,000 of Ebbers' assets and a modest home in Jackson, Miss. A far more lavish family home in Brookhaven, Miss., will be sold off as part of the settlement.
Ebbers resigned as CEO in 2002, shortly before the widespread fraud at the company came to light. Investigators eventually uncovered $11 billion in improper accounting.
That summer, WorldCom collapsed in the largest bankruptcy in U.S. history, wiping out billions of dollars of investors' money. It has since re-emerged under the name MCI Inc., based in Ashburn, Va.
At trial, Ebbers argued he was completely unaware of the fraud, and that he simply did not look at some key WorldCom financial documents that showed glaring accounting irregularities.
WorldCom remains the largest of the corporate frauds that began making headlines with the fall of Enron Corp. in late 2001. Three top executives from that company are due to go on trial in Houston in January.
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Star Tribune Article
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Last edited by Alpha Rioja; 07-13-2005 at 10:28 PM.
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07-13-2005, 10:26 PM
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