Former WorldCom chief executive Bernard Ebbers was indicted yesterday on federal charges, including securities fraud, conspiracy to commit securities fraud, and making false filings with the Securities and Exchange Commission.
In a surprise move, the company's former chief financial officer Scott Sullivan pleaded guilty and agreed to cooperate with prosecutors.
The 31-page Ebbers indictment was filed in U.S. District Court in Manhattan and was announced by U.S. Attorney General John Ashcroft, the Wall Street Journal reported.
"It is the honor, the duty, and responsibility of the United States Department of Justice to ensure that no one stands above the law-regardless of power, position, or privilege," according to a prepared text that Ashcroft delivered in Manhattan. "The rule of law-and the people's trust-depend on swift, sure justice in the prosecution of crimes that manipulate competition or deceive the public."
WorldCom, Inc. spiraled into bankruptcy last year when an $11 billion accounting fraud was uncovered. The company, now known as MCI, hopes to soon emerge from bankruptcy.
"America's economic strength depends on integrity of the market place," Ashcroft said.
Sullivan, 42, delivered his plea in federal court, admitting that he and others at WorldCom falsified company reports from 2000 through 2002 despite knowing "it was wrong," the Journal reported.
"I deeply regret my actions," he told U.S. District Judge Barbara Jones.
Ebbers has repeatedly professed his innocence in the matter.