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Ex-WorldCom Controller Pleads Guilty

Oct 11, 2002 | AP The former controller of WorldCom Inc. pleaded guilty Friday to a Mississippi securities fraud charge.

David Myers, 45, entered the guilty plea to one count of conspiracy to commit securities fraud in Hinds County Circuit Court.

Myers, who pleaded guilty to similar federal charges last month in U.S. District Court in New York, is the first person to be identified in a state investigation of WorldCom.

His initial plea had been the first admission of guilt stemming from the largest corporate accounting scandal in U.S. history.

Myers faces up to 10 years on the most serious federal charge.

He faces up to five years in prison and a fine of $5,000 on the Mississippi charge, though sentencing has been deferred. He was released on $10,000 bond on the state charge.

"We made the choice to pursue state charges against this particular defendant and there may be others we may pursue state charges against," Mississippi Attorney General Mike Moore told The Associated Press. "We, of course, are working in partnership with the U.S. attorney in New York."

Moore said prosecutors "have some cooperating witnesses who have not been charged and we have some cooperating witnesses who are also defendants because of the actions they took.

"We are getting closer and closer to getting to those who had knowledge of these illegal things."

Moore declined to identify others being investigated by federal and state authorities, including whether former WorldCom founder Bernie Ebbers was on the list.

Ebbers, who lives in Brookhaven, has not been charged and has denied any wrongdoing.

Myers was arrested in August along with former WorldCom chief financial officer Scott Sullivan. Prosecutors alleged the two directed employees of the Clinton-based company to falsify balance sheets to hide more than $3.8 billion in expenses, causing WorldCom earnings to be overstated by $5 billion.

WorldCom officials have said the total amount of financial misstatements is around $7 billion, and some reports have put the figure at $9 billion.

The deception enabled WorldCom to report a profit when it was actually losing money, according to regulators.

The company filed for bankruptcy protection in July after the scheme unraveled.

Three other WorldCom executives have pleaded guilty to similar federal charges.

Sullivan is free on $10 million bond. His lawyer, Irv Nathan, has said his client is a victim of a "rush to judgment."

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