Scott Sullivan, the former chief financial officer of WorldCom, could testify against his former boss, the company’s founder Bernie Ebbers, as part of a plea agreement with government investigators, according to a person close to the matter.
Mr Sullivan, accused of engineering a $7bn-plus accounting fraud at the bankrupt telecommunications group, has so far pleaded not guilty to multiple fraud charges. But investigators are hoping that Mr Sullivan, once Mr Ebbers’ closest confidante, might provide important testimony in a case against the former WorldCom boss.
Mr Ebbers, a legendary dealmaker who built WorldCom by acquiring dozens of telecoms companies during the boom of the telecoms market, has not been charged in connection with the company’s downfall.
Questions of whether the former chief executive knew about WorldCom’s illegal use of accounting to bolster its profits have been at the centre of the government’s inquiry so far, with attorneys continually assessing how much ammunition they may have to successfully prosecute Mr Ebbers.
Several of Mr Sullivan’s subordinates have entered into plea agreements with the government with the hope of receiving reduced sentences.
Investigators are also thought to be looking at the legitimacy behind a $400m loan made to Mr Ebbers by WorldCom as a possible source of other charges.