WorldCom Executive Accounting Scandal. Federal prosecutors, in plea negotiations with former WorldCom Inc. executive David F. Myers, have 30 additional days to indict him in the company’s accounting scandal.
Yesterday was the deadline for a grand jury in New York to indict Myers, the company’s former controller, or seek an extension from the court. Myers’s attorneys agreed to the extension so plea negotiations can continue, according to papers filed with U.S. District Court in Manhattan.
Today, two other former WorldCom executives, Scott D. Sullivan and Buford Yates Jr., are scheduled to enter pleas in federal court on charges that they played key roles in alleged fraud at the nation’s second-largest long-distance phone company.
officer plans to plead not guilty
Calls to Sullivan’s and Yates’s attorneys were not returned yesterday. Sullivan’s attorney said last week that the former chief financial officer plans to plead not guilty.
Sullivan was fired by WorldCom in June. Yates, who was director of general accounting, resigned; WorldCom has not commented on his departure.
Prosecutors also have said they will file court papers detailing the involvement of two other WorldCom officials, Betty L. Vinson and Troy M. Normand, in the accounting scandal. Vinson and Normand, who reported to Sullivan, were fired, sources with the company said.
Prosecutors were able to zero in on Sullivan, Yates, Myers and others in part because of an extensive paper trail, including e-mail and internal documents, that detail their actions during the past several years. WorldCom executives allegedly manipulated the company’s balance sheets since at least 1999 to make the company look healthy when its financial condition was deteriorating. The company sought protection from its creditors in July in the largest Chapter 11 bankruptcy filing ever.
The company’s founder and former chairman, Bernard J. Ebbers, has not been charged. Sources familiar with the investigation said it might be difficult to prosecute Ebbers, who, associates said, was not directly involved with WorldCom’s accounting.
Beyond the criminal investigation of individual executives at WorldCom, the company has been charged by the Securities and Exchange Commission with defrauding investors. WorldCom also is being investigated by at least two congressional committees.
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