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WorldCom Boss Denies Fraud

Sep 4, 2002 | BBC

WorldCom's former chief financial officer has appeared in court and pleaded not guilty to orchestrating one of the biggest corporate accounting scandals in US history.

Scott Sullivan denied artificially inflating the telephone company's profits by masking billions of dollars of expenses.

The charge said that the scheme allowed WorldCom to report earnings inflated by $5bn (£3.2bn) over more than 18 months. In total, WorldCom has admitted to accounting errors valued at more than $7bn.

Mr Sullivan, who was arrested last month, was released on bail with a surety of $10m.

WorldCom's former director of general accounting, Buford Yates, also pleaded not guilty to his alleged role in the conspiracy.

He was released on bail with a surety of $500,000.

More charges

Both men were named in a series of charges last week, and were accused off securities fraud, conspiracy to commit securities fraud and fraud in connection with the purchase or sale of securities.

They were also charged with three counts of making false filings with the Securities and Exchange Commission.

The two men and others are alleged to have begun an illegal scheme in October 2000 aimed at hiding expenses so that WorldCom earnings could be inflated to meet Wall Street expectations.

Government prosecutors said the investigation into WorldCom was continuing and there were likely to be more charges and possibly more defendants.

Assistant US Attorney David Anders said he was trying to arrange a plea agreement with WorldCom's former controller David Myers.

Mr Myers was arrested last month with Mr Sullivan but has not yet been charged.

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