An appeals court should throw out the fraud conviction of former WorldCom Inc. chief Bernard J. Ebbers because of improper jury instructions and decisions by prosecutors that kept key witnesses from testifying, defense lawyers argued yesterday.
Ebbers is appealing his conspiracy, securities fraud and false statements conviction to the U.S. Court of Appeals for the 2nd Circuit in New York. This summer, U.S. District Judge Barbara S. Jones sentenced Ebbers to 25 years in prison, a virtual life sentence for the 64-year-old former executive.
The Federal Bureau of Prisons wants to send Ebbers to a medium-security facility in Louisiana, rather than a low-security prison nearer his family in Mississippi.
Defense lawyers Reid H. Weingarten and Brian M. Heberlig recently won a bid to keep Ebbers out of prison during the appeal. Yesterday they argued that the judge improperly told jurors that they could convict Ebbers if they found he had consciously avoided knowing about an $11 billion accounting fraud. WorldCom has since emerged from the nation's largest-ever Chapter 11 bankruptcy filing as MCI Inc. of Ashburn.
The judge's instruction "created a grave risk that the jury would convict if it concluded merely that Ebbers 'should have known' about the alleged fraud," Weingarten and Heberlig wrote.
"This is a very close case in which the government failed to establish 'overwhelming evidence' of Ebbers' actual knowledge," they wrote.
The lawyers' brief also criticized the government for not giving immunity from prosecution to three former WorldCom executives, chief operating officer Ronald R. Beaumont and accounting executives Stephanie Scott and Ronald Lomenzo. Ebbers claimed the three could have provided exculpatory information about his awareness of the fraud.
"These errors greatly hindered Ebbers' ability to present a defense, unfairly lowered the government's burden of proof and offered the jury a compromise path to conviction," defense lawyers wrote. "Considered as a whole, they make a compelling case for setting aside this verdict."
The defense team also took issue with what it called the "grossly disproportionate" 25-year prison sentence for Ebbers. The sentence was five times what the judge gave former WorldCom chief financial officer Scott D. Sullivan, who pleaded guilty and provided crucial testimony against his former boss. Assistant U.S. Attorney David B. Anders previously said Sullivan was a "model cooperator" without whom the case against Ebbers might never have been filed.
Ebbers had previously agreed to forfeit cash and assets worth up to $45 million -- about 95 percent of his holdings -- to settle civil lawsuits filed by WorldCom shareholders.
The deal left his wife, Kristie, with what prosecutors described as a "modest" living allowance.
A spokeswoman for the U.S. attorney for the Southern District of New York declined to comment on yesterday's filing. The government has until Oct. 28 to file a written response in the case.