Former WorldCom Inc. chief financial officer Scott Sullivan will stand trial for securities fraud here in September, a federal judge ruled Tuesday, rejecting the Florida resident’s effort to get the case dismissed or moved to Washington.
Sullivan could now become the first person to face a jury in connection with the financial meltdown of the nation’s second-largest long-distance firm.
Several lower-ranking WorldCom officials have pleaded guilty, but Sullivan, despite detailed talks between his attorneys and prosecutors, hasn’t been able to work out a deal to resolve the seven fraud counts lodged against him, lawyers familiar with the situation said.
Prosecutors are trying to build a case against WorldCom founder and former chief executive Bernard Ebbers, who hasn’t been charged. They hope to get Sullivan to cooperate in that effort. But settlement talks have foundered, in part, over the long prison sentence that the Justice Department wants Sullivan to accept, lawyers said.
“We’re looking forward to a trial,” Sullivan’s lead attorney, Irvin Nathan, said.
Prosecutors allege Sullivan and other WorldCom officials inflated reported earnings by falsely booking operating expenses as capital expenses, which allowed the company to spread its costs over time. If convicted on all five counts of making false statements and one count each of securities fraud and conspiracy, Sullivan could be sentenced to a maximum of 65 years in prison.