WorldCom officials may be prosecuted
By Anna Marie Stolley
Bloomberg News
NEW YORK — Federal prosecutors may soon seek indictments against former WorldCom Inc. chief executive Bernard Ebbers and two other officials on charges they defrauded investors and triggered the biggest bankruptcy in history, people familiar with the investigation said.
Ebbers, former finance chief Scott Sullivan and former controller David Myers face charges that include securities, mail and wire fraud, the sources said.
Sullivan was fired after the company revealed June 25 it hid more than $3.85 billion in costs. Ebbers resigned in April, owing WorldCom about $408 million in loans he said he would repay. Myers was forced to resign in June.
"The swifter the justice, the better," said Carl Lawrence, managing director at Warwick Capital, which owns 20,000 WorldCom shares. "I want to see this get done as quickly as possible so we can put it behind us."
Indictments in the WorldCom investigation would be the Justice Department's biggest criminal prosecution so far in corporate scandals that began with Enron Corp.'s collapse in December. WorldCom, the secondlargest U.S. long-distance telephone company, has been accused of civil fraud by the Securities and Exchange Commission.
Prosecutors in New York plan to ask a grand jury to return indictments as early as next week, one person said.
News of the possible WorldCom indictments comes a day after the Justice Department accused John Rigas, founder of Adelphia Communications Corp., two of his sons and two other former company executives of looting the cable television operator of more than $1 billion. Sam Waksal, former chief executive officer of ImClone Systems Inc., was charged in June with insider trading, and Tyco International Ltd. ex-CEO Dennis Kozlowski is awaiting trial for alleged tax evasion and evidence tampering.
WorldCom said in a statement it's cooperating "fully" with all law enforcement authorities. "We have been advised that those authorities are satisfied with WorldCom's cooperation to date," the company said.
"We are confident that the prosecutors will ignore the howling mob and concentrate on the evidence, and if they do so, Mr. Ebbers will not be prosecuted," Reid Weingarten, Ebbers' lawyer, said in a statement.
