New York ? Two former WorldCom executives were arrested Thursday on charges of falsifying the books by $3.8 billion at the now-bankrupt long-distance company.

Former chief financial officer Scott Sullivan, 40, and former controller David Myers, 44, surrendered to the FBI in the latest blow to the company and corporate America, which has seen investors bail out of the stock market because of one accounting scandal after another.

Former WorldCom chief financial officer Scott Sullivan, center, is led from Federal Plaza after surrendering to federal authorities. He was arrested Thursday on charges of falsifying the books at the now-bankrupt long-distance company by .8 billion. He was released on 0 million bail.

“With each arrest, indictment and prosecution, we send this clear, unmistakable message: Corrupt corporate executives are no better than common thieves,” Atty. Gen. John Ashcroft said.

Sullivan was released on $10 million bail, Myers on $2 million. Sullivan’s bond was secured by a multimillion-dollar mansion under construction in Boca Raton, Fla.

Outside court, Sullivan’s attorney, Irv Nathan, called him “an honest and honorable man” and accused the Justice Department of making him a scapegoat. “We deeply regret the rush to judgment and the political overtones involved,” Nathan said.

Myers’ lawyers said he would plead innocent if indicted.

WorldCom, which owns MCI, the nation’s second-largest long-distance company, filed for Chapter 11 bankruptcy July 21 after disclosing the accounting abuses. It was the biggest such filing in U.S. history.

Sullivan is accused of directing Myers to conceal about $3.8 billion in expenses on the company’s balance sheet. That enabled WorldCom to continue reporting profits when it was actually losing money.

As the scheme was unraveling in June, Myers told WorldCom accountants that the company “could not continue with the cost structure at the current levels and that if the cost structure did not change, the company ‘might as well shut the doors,”‘ prosecutors said in court papers.

Former WorldCom controller David Myers walks from Federal Plaza past the media in New York. Myers was arrested Thursday and charged with securities fraud, conspiracy and filing false statements with the Securities and Exchange Commission. He was released on million bail.

The charges against Sullivan and Myers could pressure them to tell investigators what they know about their one-time boss, former chief executive Bernard Ebbers, who is also under investigation.

Federal agents led the two men out of New York’s FBI headquarters in handcuffs en route to the courthouse. The men, both wearing dark suits, did not speak to reporters.

The businessmen were charged with securities fraud, conspiracy and filing false statements with the Securities and Exchange Commission. The charges of fraud and false statements carry up to 10 years in prison each, the conspiracy charges up to five years.

Prosecutors said the defendants never disclosed the questionable accounting practices to WorldCom’s outside auditors.

Sullivan and Myers were fired in June. Also in June, the SEC filed civil fraud charges against WorldCom, accusing it of “accounting improprieties of unprecedented magnitude.”