WorldCom Trial Net Cast WiderSep 4, 2002 | Ft.com
The net has been cast wider in the criminal trial of senior WorldCom executives, according to the US Attorney's office, which told a court Wednesday it planned to name new defendants and increase its charges.
The move was announced as Scott Sullivan and Burford Yates, WorldCom's former senior finance executives, pleaded "not guilty" in the Manhattan federal court to all charges against them stemming from the telecommunication company's $7.2bn accounting fraud.
Mr Sullivan, former WorldCom chief financial officer, entered his "not guilty" plea to charges he was behind the alleged scheme to account wrongly for expenses related to third-party lines WorldCom had leased.
Mr Yates, former director of general accounting, also pleaded "not guilty" to his alleged role in the plan. He was released on a personal recognisance bond of $500,000 and ordered to surrender his passport.
His travel was restricted to two jurisdictions in New York and the state of Mississippi. Similar bail conditions had been set previously for Mr Sullivan.
Both executives were named in a seven-count indictment last week, accusing them of one count of securities fraud, and conspiracy to commit both securities fraud and fraud in connection with the purchase or sale of securities. It also charges them with three counts of making false filings with the Securities and Exchange Commission.
The conspiracy count carries a possible maximum five-year prison term and a $250,000 fine. The securities fraud and false SEC filings charges each carry a possible maximum term of 10 years and $1m fines.
The indictment alleged that the executives began carrying out the illegal scheme in October 2000 because they saw expenses were rising far too fast as a proportion of revenues, endangering WorldCom's share price.
No trial date was set because of the continuing investigation.
Mr Sullivan and David Myers, former WorldCom controller, were arrested last month after the US-based telecoms group filed the world's largest bankruptcy.