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Ex-Execs Charged in WorldCom Scandal
Thursday, August 1, 2002
(5:34 PM ET)
By Jon Van
Chicago Tribune Staff Reporter

Former WorldCom Chief Financial Officer Scott Sullivan, right, is led to a waiting car on Aug. 1 in New York after surrendering to authorities to face federal charges.
Image Credit: Kathy Willens -- AP.

The last time businessmen were led off in handcuffs by federal agents was when the Reagan administration sought to demonstrate its tough stance against insider traders, said Stephen Presser, a Northwestern University professor of legal history. “Mike Milken and Ivan Boesky got the treatment when the Reagan administration wanted to make a point,” said Presser. “It’s always fun to see bad guys led off in manacles.”

NEW YORK -- CT
Two former top financial officers at WorldCom Inc. turned themselves over to federal authorities today and were taken to a New York federal court in handcuffs to face charges of criminal fraud.

Former WorldCom controller David Myers, left, is led from Federal Plaza by authorities after surrendering to face federal charges for accounting fraud on Aug. 1 in New York. Former CFO Scott Sullivan and Myers were dismissed from WorldCom in June after the company admitted it falsely accounted for $3.8 billion in expenses, allowing executives to continue reporting profits when the company was actually losing money.
Image Credit: Louis Lanzano -- AP.

The arrest of WorldCom’s former financial officer Scott D. Sullivan, 40, and ex-controller, David F. Myers, 44, comes just a week after John Rigas, 78, and his two sons were arrested on fraud charges in running Adelphia Communications Corp.

Use of handcuffs in both cases underscores the Bush Administration’s message that it is tough on corporate wrongdoing, observers said.

In June, WorldCom management revealed that nearly $4 billion in expenses had been improperly categorized in the company’s books, giving the firm a profit when it in fact had suffered losses. Sullivan was fired and Myers resigned in connection with the announcement.

Today’s seven-count, 17-page indictment charges Sullivan and Myers with making misleading filings to the Securities and Exchange Commission and falsifying books. Their actions misled investors, according to the indictment.

Speedy, high-profile arrests of executives is unusual, said Albert Alschuler, a University of Chicago law professor.
(More: NewsDay.com News Source)
2002 © The Chicago Tribune.

A Lead-In Story:
* U.S. Ready To Charge WorldCom Ex-Officers
The Washington Post
Friday, July 26, 2002

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