Federal prosecutors in New York have asked a judge to sentence former WorldCom Inc. chief executive Bernard J. Ebbers to spend the rest of his life in prison for leading the largest accounting fraud in U.S. history.
In a court filing unsealed yesterday, the government urged U.S. District Judge Barbara S. Jones to reject any plea for leniency, arguing that Ebbers's sentence should match the extent of the fraud at the telecommunications company. Ebbers was found guilty March 15 on nine counts of conspiracy, securities fraud and false regulatory filings for his role in orchestrating $11 billion in improper accounting entries.
"One person established the culture that allowed this fraud to occur and, more fundamentally, specifically directed WorldCom employees to commit fraud rather than reveal WorldCom's true financial condition to the public: Bernard Ebbers," the government said.
A probation office report to Jones on May 11 determined that sentencing guidelines allow her to impose a life sentence, based on Ebbers's role, the size of the fraud and the number of victims. Earlier this month, lawyers for Ebbers urged against using the guidelines, saying his heart condition, his charitable works and other factors argued for leniency. Ebbers's lawyers also said Jones could depart from the guidelines, citing a Supreme Court ruling this year that allowed judges to sidestep the federal sentencing rules.
Reid H. Weingarten, who led Ebbers's defense, did not return calls seeking comment.
Government lawyers said that a review of case law and recent high-profile executive criminal cases supports following the sentencing guidelines. They also argued that the WorldCom fraud -- and Ebbers's role in it -- "cannot be overstated."
"The fraud at WorldCom was the largest securities fraud in history. Along with Enron, the name WorldCom has become synonymous with fraud," the government said.
The government said investors lost more than $2.2 billion as a result of WorldCom's fraud, which was announced in the summer of 2002. WorldCom ultimately filed for Chapter 11 bankruptcy protection, reorganized its finances, and emerged as MCI Inc. MCI, which moved its headquarters from Mississippi to Ashburn, has agreed to be purchased by Verizon Communications Inc.
In arguing that Ebbers, 63, should go to prison for life, the government also cited the recent sentence of John J. Rigas, the founder and former chief executive of Adelphia Communications Corp., for securities fraud and for siphoning millions of dollars from the cable television company. On June 20, a federal judge sentenced Rigas, 80, to 15 years in prison. The prosecution also cited the case of an insurance executive convicted of defrauding insurance regulators who was sentenced to 22 years.
The government also said Jones should disregard the more than 100 letters from Ebbers friends and family testifying to his charitable works and character.
"Ebbers has clearly gathered during his life a group of loyal and dedicated friends, which reflects well on him," the government said. "However, this does not distinguish his good works from what would ordinarily be expected of any individual who claims to care about others, and particularly those with the means to devote time and resources to assisting others in need."
Ebbers is scheduled to be sentenced July 13. His lawyers have said he will appeal his conviction.