WorldCom Admits Overstating Profits By $11 Billion Since '99Apr 1, 2003 | Bloomberg News
WorldCom, which filed the largest U.S. bankruptcy last year, has uncovered $11 billion in overstated profit, $2 billion more than what has been publicly disclosed, people familiar with the matter said.
WorldCom, the No. 2 U.S. long-distance telephone company, likely will announce by June that it will restate earnings to reflect the errors, which date to 1999, sources said. WorldCom doesn't expect to find more mistakes, sources said.
The new irregularities show the lengths to which former WorldCom executives went to hide the phone company's deteriorating performance. Federal prosecutors are trying to build a criminal case against former Chief Executive Officer Bernard Ebbers and have already charged ex-Chief Financial Officer Scott Sullivan with securities fraud. He has pleaded not guilty.
New CEO Michael Capellas is trying to clean up WorldCom's books to guide it out of bankruptcy this year. The Clinton-based company filed for Chapter 11 protection in July after initially revealing it hid $3.85 billion in costs.