<

Ex-WorldCom Execs Face Criminal Charges
Thursday, August 1, 2002
(12:54 PM PT)
By Nancy Weil
Assistant News Editor / IDG News Service -- an InfoWorld affiliate

Stacy Cowley in New York & Scarlet Pruitt in Boston contributed to this report



"We very much regret the rush to judgment and the part that politics has obviously played in bringing with great fanfare criminal charges with less than a month's reflection on WorldCom's complex accounting issues," Sullivan's attorney, Irvin B. Nathan said in a written statement. "As President Bush acknowledged recently, accounting procedures are not black and white; there are various shades of gray. There is substantial room for disagreement on accounting issues, including cost allocation. We will vigorously contest the criminal charges brought against Mr. Sullivan, who looks forward to his day in court, hopefully without the unfair taint of the current political climate."

Former WorldCom executives Scott Sullivan and David Myers are "no better than common thieves" and "will meet the judgment they fear and the punishment they deserve," U.S. Attorney General John Ashcroft said at a press conference Thursday afternoon soon after the two were arraigned in a Manhattan federal court.

They each face up to 65 years in prison if convicted on charges that they conspired to commit securities fraud and made false filings with the U.S. Securities and Exchange Commission (SEC), Ashcroft said at the press conference in Washington, D.C., where he and other federal law enforcement officials focused as much on applauding their own investigative efforts as they did providing additional details about the WorldCom case.

Sullivan, WorldCom's former chief financial officer, and Myers, the former controller, appeared in the U.S. District Court for the Southern District of New York Thursday afternoon after surrendering to the U.S. Federal Bureau of Investigation earlier in the day. A federal judge set bail for Sullivan at $10 million and $2 million for Myers. A Sept. 3 hearing was scheduled in the case. Sullivan posted bail using a lien on property in Boca Raton, Fla., and Myers also was released on bail, according to published reports.

Sullivan and Myers are accused of hiding $3.8 billion in expenses to make it appear that WorldCom was earning a profit instead of incurring net losses over a 15-month period involving four quarter financial reports in 2001 and the first quarterly report for 2002.
(More: InfoWorld.com News Source)
2002 © IDG News Service.

The criminal charges are politically motivated and rushed, Sullivan's attorney, Irvin B. Nathan, said in a written statement.

The charges were motivated by a crime. Sounds like Nathan would prefer denying his client his rights. I’m sure Sullivan would like nothing more than to clear his name and reputation, and what better way than a speedy, public trial?

Dan (listening for those unexpected deals that seem to happen at times like this)