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WorldCom Executives Charged with Fraud
Friday, August 2, 2002
By Rupert Cornwell
Independent Digital (UK)

Coming after the similar treatment handed out last week to John Rigas, founder of the failed Adelphia telecommunications group, and two of his sons, yesterday's arrests leave no doubt the authorities intend to make public examples of prominent disgraced chief executives, to discourage any future imitators.

Two former top executives of the bankrupt telecommunications colossus WorldCom were yesterday led handcuffed into court in New York and charged with fraud in connection with the biggest business collapse in US history.

Scott Sullivan, WorldCom's former chief financial officer, and David Myers, its former controller, had turned themselves in to the FBI at 7am from where they were taken to federal court.

The charges claim Mr. Sullivan directed Mr Myers to hide about $3.8bn of expenses by scattering them through the company's accounts and describing them as capital expenditure, allowing WorldCom to inflate its earnings when it was actually losing money.

Conspicuous by his absence in court yesterday was Bernie Ebbers, the flamboyant founder of WorldCom, who quit the company two months before it disclosed the massive accounting irregularities on 25 June. It is widely believed that the authorities may offer Mr. Sullivan and Mr. Myers a plea bargain in return for their co-operation, which would presumably strengthen a subsequent case against Mr. Ebbers.
(More: Independent.co.uk News Source)
2002 © Independent Digital (UK), Ltd.

Dan