Archive for Friday, July 26, 2002

Feds may file WorldCom charges

Law enforcer says prosecutors plan to indict executives

July 26, 2002


— Federal prosecutors plan to charge former officers of WorldCom Inc. sometime next week for their suspected roles in the massive financial wrongdoing at the bankrupt telecommunications giant, a law enforcement official said Thursday.

"Indications are that charges will be filed sometime next week," a source close to the investigation, speaking on condition of anonymity, said.

The official would not identify which individuals, or how many, were likely to be charged. But the Wall Street Journal reported Thursday that former chief financial officer Scott Sullivan and former controller David Myers are expected to be indicted on a variety of charges related to billions of dollars in accounting frauds.

The government also is likely to seek the indictment of former chief executive Bernard Ebbers, the Journal reported, citing unidentified sources.

Federal prosecutors set a deadline of next Wednesday to file indictments against Sullivan and Myers, who were dismissed from the company last month, the sources told the newspaper. They said prosecutors are seeking the former WorldCom officials' cooperation to produce evidence against Ebbers, who resigned two months before the company admitted it inflated earnings by nearly $4 billion.

"We are confident that the prosecutors will ignore the howling mob and concentrate on the evidence," Ebbers' attorney Reid Weingarten said in a statement. "And if they do so, Mr. Ebbers will not be prosecuted."

WorldCom also could be indicted as a corporation under a plan being considered by the Justice Department, the newspaper reported.

WorldCom spokeswoman Julie Moore said Thursday that the company had no indication the indictments were forthcoming.

"That is flatly inconsistent with what federal prosecutors have communicated to the company," she said.

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