U.S. prosecutors Monday added six new counts to the indictment of former WorldCom CEO Bernie Ebbers, charging that he filed false documents with the Securities and Exchange Commission.
The grand jury indictment against the 62-year-old Ebbers include one new count for each quarterly or annual report WorldCom filed from the fourth quarter of 2000 through the first quarter of 2002, says the U.S. Attorney’s Office in New York.
Ebbers in March was charged with conspiracy, securities fraud and making false statements in connection with the company’s $11 billion accounting scandal, which drove it into the largest bankruptcy filing ever. Monday’s indictment supercedes and includes those charges.
Prosecutors charged Ebbers after former chief financial officer Scott Sullivan pleaded guilty to similar charges and agreed to testify against him. Ebbers is slated to face trial in November. A hearing in the case is scheduled for today.
Prosecutors say Ebbers insisted that WorldCom â€” which in April emerged from bankruptcy protection and changed its name to MCI â€” cook the books to meet analysts’ expectations. Executives, they say, improperly labeled operating expenses as capital costs so they could be deducted over a longer period and drew from the reserve fund to pay the expenses.
The six new counts each carry a sentence of up to 10 years in prison and a $1 million fine. Under the previous charges, Ebbers faced up to 25 years and a $2.25 million fine.