Former WorldCom chief executive Bernard Ebbers, the biggest fish in the biggest corporate collapse in US history, was convicted on Tuesday on fraud charges, capping off a three-year criminal probe.
Ebbers, 63, accused of being the mastermind of the US$11 billion fraud that forced the telecom giant into bankruptcy in 2002, was found guilty on all charges by a federal court jury after a six-week trial.
Ebbers faced charges of securities fraud, conspiracy and filing false reports with regulators, each of which carries a lengthy prison sentence.
PHOTO: AP
A distraught-looking Ebbers made no comment as he left the courthouse, surrounded by cameramen and reporters. He entered a car with his wife and stepdaughter.
Ebbers will be sentenced on June 13 by US District Judge Barbara Jones, but the conviction -- which could lead to a sentence of as much as 85 years in prison -- means a virtual life sentence for Ebbers unless it is overturned on appeal.
"Today's verdict is a triumph of our legal system and the application of our nation's laws against those who breach them," US Attorney General Alberto Gonzales said. "We are satisfied the jury saw what we did in this case: that fraud at WorldCom extended from the middle-management levels of this company, all the way to its top executive."
Reid Weingarten, Ebbers' lead defense attorney, said he was confident his client would be vindicated on appeal.
"CEOs have a responsibility but it doesn't mean they've committed crimes when misdeeds were committed in their organizations that they didn't know about," he said. "The captain of the ship is responsible for the ship, but is not criminally responsible unless he acted with criminal intent. And I don't think Mr. Ebbers ever acted with criminal intent, and still don't today, despite the verdict."
WorldCom, along with Enron, became a symbol of corporate misconduct, inspiring Congress to pass tough legislation holding corporate leaders accountable for financial misconduct at their companies.
Ebbers, who built one of the biggest telecom empires at the height of the tech bubble, is the most prominent executive to face prison time. Top executives at Enron are due to go on trial next year in Texas.
Shareholders lost about US$180 billion in WorldCom's collapse, 20,000 workers lost their jobs and the company went bankrupt. The company came out of bankruptcy last year, renamed as MCI Inc.
The Ebbers trial is the latest in a series of attempts by prosecutors to nail senior executives for charges of cooking company books, hampering federal investigations and using companies as their own personal piggy banks.
Ken Boehm, chairman of the National Legal and Policy Center's Corporate Integrity Project, said the decision was "the right verdict."
"It was the world's largest accounting fraud, it was far from a victimless fraud," Boehm said. "People's pensions were wiped out, many people lost their jobs and livelihood. I think it sends a message to corporate executives that, unlike in the past, they will be held accountable for their actions."
The star prosecution witness in the case was former chief financial officer Scott Sullivan, who portrayed Ebbers as a hands-on CEO who encouraged the accounting scheme to help meet Wall Street financial targets.
Ebbers' lawyers, meanwhile, contend that the CEO delegated most authority and that the fraud was orchestrated by Sullivan, who cut a deal with prosecutors for leniency in exchange for his testimony.
Sullivan, who has pleaded guilty to accounting fraud charges as part of an agreement with prosecutors, acknowledged that he directed the manipulation of the books from 2000 to 2002 but that Ebbers was well aware of the situation.
Appearing in his defense after weeks of testimony from Sullivan for the prosecution, Ebbers sought to play up his humble roots and almost accidental rise as a major corporate leader.
"I was a very demanding boss," he said, but he added: "I know what I don't know."
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS