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New charges filed against ex-WorldCom CEO

Federal prosecutors brought new charges Monday against former WorldCom CEO Bernard Ebbers, accusing him of making false filings with the Securities and Exchange Commission.
/ Source: The Associated Press

Federal prosecutors brought new charges Monday against former WorldCom CEO Bernard Ebbers, accusing him of falsifying six regulatory filings about the financial condition of the telecommunications giant.

Ebbers was already facing fraud and conspiracy charges in the collapse of WorldCom, whose $11 billion accounting fraud led to the largest bankruptcy in U.S. history.

Prosecutors had previously said Ebbers, 62, also submitted a falsified Form to the Securities and Exchange Commission in November 2000.

The new indictment, returned by a federal grand jury, include six additional charges of falsifying similar SEC forms — four in 2001 and two in 2002.

A call to Ebbers’ lawyer for comment was not immediately returned.

Ebbers is scheduled to go to trial in November. He pleaded not guilty to the original three counts against him — fraud, conspiracy and the single false SEC filing — and will now have to enter pleas on the new charges.

The three original charges carried up to 30 years in prison. The additional six add 60 years to the potential sentence, although any sentence would be drastically reduced under sentencing guidelines.

Federal prosecutors indicted Ebbers in March after the former No. 2 official at WorldCom, chief financial officer Scott Sullivan, agreed to plead guilty and testify against him.

A hearing in the case — already scheduled before prosecutors announced the new charges — was set for Tuesday.

Ebbers resigned from WorldCom in April 2002, well after the company’s stock price had begun a steady decline but soon after questions had begun to swirl about the company’s finances.

Two months later, WorldCom announced it had uncovered nearly $4 billion in hidden expenses — the beginning of a spiral that would become the largest corporate fraud in U.S. history, estimated at $11 billion.

WorldCom filed for bankruptcy July 21, 2002.

A WorldCom report released in June 2003 said Ebbers fostered a poisonous corporate culture and said he was “aware, at a minimum, that WorldCom was meeting revenue expectations through financial gimmickry.”