Ex-WorldCom Executive Vinson Pleads Guilty To Role In Accounting FraudOct 10, 2002 | The Wall Street Journal
A former midlevel WorldCom Inc. executive pleaded guilty to felony counts of conspiracy and securities fraud, becoming the third employee to acknowledge a role in the telecommunications giant's $7.2 billion accounting scandal.
Betty Vinson, who worked in the company's general accounting office, submitted her plea Thursday at a proceeding in front of U.S. Magistrate Judge Andrew Peck. Her former colleague, Troy Normand, is expected to enter a guilty plea to similar charges in front of a different judge at 4:30 p.m. EDT Thursday.
David Myers, WorldCom's former controller, and Buford Yates, its former director of general accounting, have already entered guilty pleas and indicated that they falsified financial records at the behest of their superiors.
WorldCom, Clinton, Miss., disclosed in June that it hid $3.8 billion in expenses and falsely posted profits over a five-quarter period beginning in early 2000. The company, which has since filed the largest bankruptcy in history, later expanded its planned financial restatement to $7.2 billion.
Ms. Vinson, who served as director of WorldCom's management reporting, raised concerns over improper accounting, according to WorldCom documents released by a congressional committee in July.
During her court proceeding Thursday, Ms. Vinson said in a soft voice that she was ordered by her supervisors to make adjustments to WorldCom's ledger and, specifically, to capitalize general expenses. "This had the effect of increasing WorldCom's net revenues," added Ms. Vinson.
Her boss, Mr. Yates, pleaded guilty Monday to the same crimes as Ms. Vinson. During his proceeding, he said he followed orders from his supervisors, former WorldCom financial chief Scott Sullivan and Mr. Myers, to make accounting adjustments that artificially boosted WorldCom's profits.
Mr. Myers pleaded guilty to one count each of securities fraud, conspiracy to commit securities fraud, and making false filings with Securities and Exchange Commission. Mr. Myers told a federal judge he helped manufacture profits at the behest of "senior management" as part of a scheme to defraud investors and meet Wall Street expectations.
The guilty pleas from the three officials are expected to put the pressure on Mr. Sullivan, who has maintained that WorldCom's accounting practices were legitimate.
Ms. Vinson could face up to 15 years in prison, although she will likely receive less because of her cooperation agreement with the Manhattan U.S. attorney's office. She is scheduled to be sentenced Jan. 13.
Outside the courtroom, her attorney, Joe Hollomon, declined to say whether Ms. Vinson would implicate WorldCom's former chief executive, Bernard Ebbers, who hasn't been charged with any wrongdoing. He said Ms. Vinson, in her role as a WorldCom accountant, spent little time with Mr. Ebbers.
Mr. Hollomon, who also represents Mr. Normand, added, "She complained to David Myers, who, as my understanding, communicated those complaints to Sullivan and others."