NEW YORK — One win, one loss and one big trial to go.

That's essentially where the Justice Department's war on corporate crime stands after yesterday's stiff jail sentence for former WorldCom CEO Bernard Ebbers and the decision by an Alabama prosecutor to give up completely on any further criminal charges against former HealthSouth CEO Richard Scrushy.

Other corporate fraud prosecutions continue in Denver, New York and elsewhere, but the final hurdle in the campaign against accounting fraud in Corporate America will be in January, when the trial of Enron's top three former executives — Ken Lay, Jeff Skilling and Rick Causey — begins in Houston.

"That's going to be the climax" of the government's campaign against corporate crime, says Peter Henning, a law professor at Wayne State University. "But the sentence for Ebbers may well be the high-water mark."

Even with some of the government's misfires, Ebbers' 25-year prison sentence has alerted corporate executives that crime doesn't pay, says Tom Newkirk, a former associate director of enforcement at the Securities and Exchange Commission who is now at Jenner & Block.

"For those who aren't motivated by doing the right thing for its own sake, the efforts of the Justice Department and the SEC over the last three years ought to strike the fear of God into them," he says.

According to Jacob Frenkel, a former prosecutor now at Shulman Rogers, "The ultimate objective of the deterrent effect has been achieved."

But the announcement yesterday by Alice Martin, the U.S. attorney in Birmingham, Ala., that she would not pursue any more criminal charges against Scrushy showed that prosecutors don't always get their way. Two weeks ago, Scrushy was acquitted of masterminding a $2.7 billion fraud at his company, even though five former chief financial officers testified against him.

"What we have is clearly a hit-and-miss system of criminal justice," says Jack Coffee, a securities law expert at Columbia University. "Bernie Ebbers gets 25 years based on the word of one cooperator, and five witnesses can't convict Richard Scrushy. You win some and you lose some."

U.S. District Judge Barbara Jones, who gave Ebbers the 25-year sentence, appeared to know that she had to set an example. "Anything less would have the potential of creating sentencing disparities," she said in court yesterday.

Unlike violent criminals, who are prone to irrational acts, white-collar criminals do respond to what they see in the marketplace, Coffee says.

"This was a classic case for an exemplary sentence, and it will reach a relevant audience that can be deterred and does make more rational decisions than violent street criminals," he says.

But some lawyers view the sentence as harsh.

"Should a corporate executive get 25 years when drug dealers are serving five to 10?" asks Frenkel, who contends that 10 years would have been enough.

"If people would take the time to look at it, they would see that the system is not necessarily working right," he adds. "Bernie Ebbers is being punished for the failure of the U.S. government to have sent a meaningful deterrent message before the corporate fraud cases of the last few years."

Former WorldCom employees don't agree. At Ebbers' sentencing yesterday, Henry Bruen Jr. told the court that after the accounting fraud was revealed in June 2002, his career at the company, as well as the value of his stock options, plummeted. He was laid off the following January, one of 30,000 employees to get a pink slip in the aftermath of the fraud.

"That was sheer hell, and I've been totally devastated since that day," he told the court. Bruen, 47, says he has been unable to find work and has lost income and assets once worth $800,000. "Where do I get my life savings back and my career reinvigorated?"