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WorldCom's Former Financial Chief Pleads Not Guilty To Fraud

Sep 4, 2002 | Dow Jones Newswires

The former chief financial officer of WorldCom Inc. pleaded not guilty Wednesday to charges that he orchestrated a $7.2 billion accouting fraud at the telecommunications giant.

Scott Sullivan, wearing a navy pin-striped suit, entered the plea at an arraignment in front of U.S. District Judge Barbara S. Jones in Manhattan.

At the arraignment, Assistant U.S. Attorney David Anders told the judge the investigation into WorldCom's accounting scandal is continuing.

"We do plan to supersede at some point to add charges to the same scheme and to potentially add defendants," he said.

Mr. Sullivan, 40 years old, of Boca Raton, Fla., was arrested in early August and indicted last week along with Buford Yates Jr., a former WorldCom accounting executive, on charges that they conspired to mask massive losses at the company for more than a year.

Mr. Yates, 46, of Brandon, Miss., also pleaded not guilty at Wednesday's hearing.

After the hearing, Mr. Sullivan, accompanied by his wife Carla, left the courthouse without speaking to a crowd of reporters and photographers gathered outside.

His attorney, Irv Nathan, who last month called the charges a "rush to judgment" on the government's part, declined to comment.

Mr. Yates' attorney, David Schertler, said he plans to ask the court to transfer the case to the Southern District of Mississippi, near his client's home.

When asked if Mr. Yates plans to fight the charges, Mr. Schertler said he is still reviewing the indictment and considering options.

Three others have been implicated in the scheme, including David Myers, the company's former controller. Prosecutors noted in a court filing Tuesday that he is negotiating a plea bargain to last month's criminal charges.

The government has indicated that Betty Vinson and Troy Normand, who served in lower-level posts at the company, are cooperating and will potentially plead guilty in the case.

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.

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