-- WorldCom Inc.'s former chief financial officer will sell the 10-bedroom, Mediterranean-style mansion he is building in South Florida and turn the proceeds over to investors who lost billions in the accounting fraud.
Investors should recover at least $5 million from Scott D. Sullivan's Boca Raton home, plus about $200,000 from his WorldCom retirement account, New York state officials said.
The agreement settles Sullivan's part in a lawsuit brought by investors who lost billions of dollars when WorldCom collapsed three years ago in an $11 billion accounting fraud -- the largest in U.S. history.
Sullivan also faces sentencing Aug. 11 for his role in the fraud and is almost certain to receive prison time. He was the star witness against WorldCom's former chief executive Bernard J. Ebbers, who was sentenced to 25 years in prison.
Real estate listings describe the nearly completed Boca Raton mansion as an elegant 30,000-square-foot home set on four acres of lakefront property.
Besides its 10 bedrooms, the home also features nine full bathrooms, an elevator and seven fireplaces made of carved stone and mahogany, the listings said.
The home is listed for nearly $11 million. The $5 million figure for investors comes after broker fees and existing liens Sullivan must pay off, New York state Comptroller Alan G. Hevesi said.
A federal judge has scheduled a hearing Thursday to consider whether to give the settlement preliminary approval. Hevesi's office is the lead plaintiff in the investor suit.
The settlement also orders Sullivan's wife to turn over some of her personal money into a trust fund that will go toward expenses for raising the couple's young daughter.
The two remaining defendants in the investor lawsuit, former WorldCom controller David F. Myers and former accounting director Buford Yates Jr., have so little money left they are unable to pay investors anything, Hevesi said.
Myers and Yates -- along with two other lower-ranking WorldCom accountants who pleaded guilty in the fraud -- also face sentencing in August but are likely to get less prison time than Sullivan.
Investors have already recovered more than $6 billion in settlement money from the class-action suit, most of it from major investment banks that underwrote WorldCom securities.
Ebbers agreed to turn over nearly all his personal assets and have them sold off. The proceeds are expected to top $25 million and could reach as high as $40 million.
At Ebbers's trial, Sullivan described repeated pressure from his boss to "hit the numbers" -- a phrase he said he interpreted as an order to alter WorldCom's financial results to please Wall Street.
Lawyers for Ebbers argued unsuccessfully that Sullivan was the true mastermind of the accounting fraud and that Ebbers, unfamiliar with the intricacies of accounting, was kept in the dark.