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Ex-WorldCom CFO Faces Indictments

Aug 28, 2002 | AP

Scott Sullivan was a mover and shaker as WorldCom's top financial officer. In return, the former darling of the telecommunications industry rewarded his efforts with a big salary and even larger bonuses.

But in a span of eight weeks, Sullivan lost his job, faced a demand that the $10 million bonus he received in 2001 be returned and was named in a criminal complaint related to a multibillion dollar accounting scheme.

Even the multimillion dollar mansion Sullivan was building in Boca Raton, Fla., had to be used as collateral for his $10 million bond on the criminal charges filed Aug. 1.

On Wednesday, federal prosecutors indicted Sullivan on seven counts, accusing him of overseeing a conspiracy to hide operating expenses at WorldCom in order to boost earnings reports.

He joined WorldCom in 1992, became a director in 1996 and was considered an architect of the company's rapid growth in the 1990s, including the acquisition of MCI Communications in 1998 for $30 billion.

The Clinton, Miss.-based company admitted June 25 that it falsely accounted for $3.8 billion in expenses. The same day, it fired Sullivan, who was subsequently accused by the company's auditor, Arthur Andersen, of withholding crucial information about WorldCom's bookkeeping.

During his years with WorldCom, Sullivan worked closely with Bernie Ebbers, the telecom's founder and former chief executive, and became a wealthy man.

Last year, Sullivan earned a salary of $700,000 and a received a conditional $10 million bonus. Now in bankruptcy, the company's new leadership is demanding the bonus money back.

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