Wednesday, June 19, 2024

WorldCom Execs Face Sentencing

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Former WorldCom director of accounting Buford Yates has been sentenced to a year and a day in prison for his part in the massive fraud that led to the telecom’s bankruptcy in 2002.

Yates, 48, pleaded guilty in Manhattan Federal Court in 2003 to conspiracy and securities fraud charges for his role in a falsifying the financial statements to make a floundering WorldCom appear profitable.

He was ordered to surrender to a federal correctional facility on Oct. 10.

On Thursday, the government’s star witness in the $11 billion fraud case against former WorldCom boss Bernie Ebbers, will also face a judge for sentencing.

Former finance boss Scott Sullivan, 42, is looking at 25 years in prison on similar charges for his role in cooking company books.

During the Ebbers trial, which resulted in a guilty verdict and an 85-year stretch for Ebbers, Sullivan spent five days on the stand detailing how the books were altered and that the orders had come from Ebbers.

Sullivan told the jury that the former CEO repeatedly pressured him to ”hit our numbers” when the telecom giant was struggling to generate revenues.

Sullivan said Ebbers pushed him every quarter from 2000 to 2002 to hit the marks set by Wall Street analysts — regardless of the company’s performance. He also testified that he helped create two sets of accounting books.

In order to control losses from stagnating revenues and rising operation costs, Sullivan said Ebbers pressured the accounting department to inflate revenues while hiding expenses.

Sullivan also told the jury that company executives, including Yates, ”made adjustments [in accounting] that had nothing to do with business.”

Former controller David Myers, 47, also is scheduled to face sentencing today. He pleading guilty in 2002 to conspiracy, securities fraud charges.

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