Testimony from former WorldCom Inc. finance chief Scott D. Sullivan was "the key factor" in winning a fraud conviction against his former boss Bernard J. Ebbers, federal prosecutors said in papers filed in advance of Sullivan's sentencing.
Government lawyers called Sullivan a "model cooperator" and urged a judge to be lenient when he is sentenced Aug. 11 on fraud and conspiracy charges. The charges carry a maximum sentence of 25 years, but Sullivan could receive less time if the judge takes his help into account.
Prosecutors set out their request in a letter to U.S. District Judge Barbara S. Jones, filed late last week.
For the first time, prosecutors provided details about Sullivan's talks with the government. They said Sullivan, 43, contacted Justice Department officials before his August 2002 arrest to offer his assistance. Plea talks broke down during rampant media speculation. But the negotiations started again in early 2004, after Sullivan learned that former Enron Corp. finance chief Andrew S. Fastow had agreed to help prosecutors build a case against his former supervisors.
"Sullivan quickly gained the trust and confidence of the prosecutors and investigators he assisted," Assistant U.S. Attorney David B. Anders wrote.
Among other things, Sullivan completed what prosecutors called intense "homework assignments," pointing them to key evidence and interpreting financial papers the conspirators used to hide expenses and inflate revenue.
Perhaps most important were Sullivan's descriptions of his one-on-one conversations with Ebbers, which he recounted during seven days on the witness stand during Ebbers's trial earlier this year. The talks provided key insights into Ebbers's state of mind.
"Without this type of information, Ebbers could not have been charged, let alone convicted, of the conduct in this case," prosecutors wrote.
A jury found Ebbers guilty of conspiracy, fraud and false statement charges in March. Two weeks ago, a judge sentenced Ebbers to serve 25 years in prison. Defense lawyers Reid H. Weingarten and Brian M. Heberlig named Sullivan as the chief culprit and argued that the fraud never could have taken place without his accounting prowess. They also said they would appeal if Sullivan receives a wildly disparate sentence from that of Ebbers.
In another new detail, prosecutors wrote that Sullivan helped them and Securities and Exchange Commission officials with information relevant to other investigations involving the telecommunications industry. The government lawyers did not provide details about those investigations, and they did not name the companies involved.
Sullivan said he booked billions of dollars in phony entries and performed other accounting tricks at Ebbers's behest in a scheme to meet ambitious Wall Street earnings targets from 2000 to 2002. The WorldCom fraud ultimately topped $11 billion and led to the nation's largest bankruptcy filing. The Ashburn company has since emerged from bankruptcy protection as MCI Inc.
On Tuesday, Sullivan agreed to settle a class-action lawsuit filed by WorldCom shareholders by turning over $5 million from the eventual sale of his 30,000-square-foot mansion in Boca Raton, which includes a two-story boat dock and an outdoor pool with waterfall spa and gazebo, according to real estate listings. The home is worth about $10 million, the government said.
Sullivan also will hand over $200,000 in retirement savings, New York state Comptroller Alan G. Hevesi said.