NEW YORK – A federal judge on Wednesday sentenced former WorldCom Inc. chief executive Bernard Ebbers to 25 years behind bars for his role in the nation’s largest accounting fraud. It was the harshest prison term yet to result from the corporate scandals that rocked the stock market three years ago.
The once-brash mogul, 63, wept and sniffled as U.S. District Judge Barbara Jones imposed the sentence in a packed courtroom. Ebbers, a former basketball coach who built a telecommunications empire from scratch, must serve 85 percent of the term, making him eligible for release in about two decades. The judge recommended he be sent to a low-security facility in Yazoo City, Miss., so relatives and friends who live nearby could visit.
“Although I recognize … this is likely to be a life sentence for Mr. Ebbers, I find anything else would not reflect the seriousness of the crime,” the judge said.
Ebbers, who maintained his innocence during the trial, waived his right to speak. He hunched over and clutched the back of his chair after the two-hour proceeding ended. His wife, Kristie, cried on his shoulder. Defense lawyers vowed to appeal and sought to delay his Oct. 12 deadline to report to prison.
“We’re not giving up,” lawyer Reid Weingarten said. “Bernie Ebbers is not giving up. We’re going to pursue an appeal as vigorously as possible.”
The sentence was the latest move in a long-running government effort to hold business executives accountable for malfeasance that occurred on their watch. Earlier this year, the 80-year-old founder of Adelphia Communications Corp., John Rigas, received a 15-year prison sentence. Two weeks ago, an Alabama jury acquitted former HealthSouth Corp. chief executive Richard Scrushy on 36 fraud and conspiracy charges. Former Tyco International Ltd. chief Dennis Kozlowski will be sentenced in August on larceny charges. The final chapter is set to begin when one-time Enron Corp. leaders Kenneth Lay and Jeffrey Skilling face trial in Houston in January.
Prosecutors opposed efforts that would allow Ebbers to remain free pending the results of his appeal. The judge, who expressed doubts about the likelihood of overturning the March conviction on securities fraud, conspiracy and false-statements charges, nonetheless ordered the government to file court papers within three weeks responding to the defense request.
“This case is almost the standard for large frauds,” Assistant U.S. Attorney David Anders told the judge. “It’s the case defendants for years to come will point to.”
The fraud at WorldCom ultimately topped $11 billion and led to the country’s biggest bankruptcy filing in July 2002. Nearly 17,000 employees lost their jobs as a result of the scheme to bury expenses and inflate revenue, according to a probation report. The Ashburn, Va., company has since emerged from bankruptcy protection and renamed itself MCI Inc.
In June, Ebbers agreed to pay $5.5 million cash and to hand over his Clinton, Miss., mansion and other assets worth as much as $40 million to resolve claims filed by WorldCom shareholders who lost billions of dollars when the company collapsed.
Associated Press
Former WorldCom CEO Bernard Ebbers leaves federal court after his sentencing Wednesday in New York.
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