WorldCom Securities Fraud. Two former WorldCom accounting managers pleaded guilty yesterday in U.S. District Court in Manhattan to conspiracy and securities fraud stemming from the telecommunication giant’s staggering multi-billion-dollar accounting scandal.
Betty Vinson, 47, who worked in the Clinton, Miss., firm’s General Accounting Office, told U.S. Magistrate Judge Andrew Peck yesterday morning that she had committed securities fraud and conspiracy at the behest of her superiors.
Later yesterday, Troy Normand, 35, another accounting manager working with her at ‘WorldCom’, entered a guilty plea before U.S. District Court Judge Gerald Lynch, admitting that he had knowingly misstated the firm’s finances to misrepresent the financial condition and performance of ‘WorldCom’.
The duo, admitting they worked with other WorldCom employees, caused WorldCom’s reported earnings to exceed actual earnings by about $5 billion from the third quarter of 2000 through the first quarter of 2002.
The two are the latest ‘WorldCom’ employees to plead guilty: Buford “Buddy” Yates Jr., who supervised Normand and Vinson, pleaded guilty Monday while former Controller David Myers pleaded guilty last month.
securities fraud and conspiracy charges
All are expected to cooperate with prosecutors in a case against former ‘WorldCom’ chief financial officer, Scott Sullivan, indicted on securities fraud and conspiracy charges. Bernard Ebbers, former ‘WorldCom’ chief executive, has not been charged but prosecutors have been attempting to determine what he knew about the massive fraud.
Speaking softly, Vinson told Peck yesterday that she was ordered by supervisors in October 2000 to misstate $800 million on WorldCom’s ledgers to make it appear much more profitable. “I was very concerned about the order to make the adjustment,” she said.
Both Vinson and Normand face up to 15 years in prison and fines of more than $1 million; however they are expected to get lesser terms because of their cooperation in the ongoing investigation.
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