WorldCom's former chief financial officer Scott Sullivan was sentenced to five years in prison yesterday for his role in the $11 billion accounting fraud that led to the telco giant's bankruptcy.
Sullivan plead guilty to fraud, conspiracy and filing false financial documents last year and co-operated with prosecutors, a fact which led to a letter to Judge Barbara Jones recommending a reduced sentence..
Sullivan's co-operation included turning against his former boss, former WorldCom CEO Bernard Ebbers, who was sentenced to 25 years in jail in July for fraud. At 63 and in poor health, the sentence is effectively for life. Sullivan, 43, was the prosecution's main witness against Ebbers, and the only person who testified that he discussed the WorldCom fraud directly with Ebbers.
The sentencing of Sullivan closes a chapter in the history of WorldCom, which grew into an international communication giant in the 1990s through acquisitions. The WorldCom case revolved around accounting mis-statements that were engineered to bolster the company's share price.
WorldCom, now operating under the name MCI, filed for bankruptcy in July 2002 after disclosing that employees had falsified records to conceal losses and inflate earnings. Itemerged from bankruptcy in April 2004 after agreeing to a $750 million settlement for accounting irregularities with the US Securities and Exchange Commission. The company is now merging with Verizon Communications.
During the past week, four other former WorldCom executives have been sentenced. The executives had also co-operated with prosecutors, and received sentences ranging from probation to one year and one day.