Appeals court upholds conviction of former WorldCom CEO
7/28/2006NEW YORK A federal appeals court today upheld the conviction of former WorldCom Inc. Chief Executive Bernard Ebbers on charges related to a multibillion dollar accounting fraud.
The ruling by the three-judge panel of the 2nd U.S. Circuit Court of Appeals could clear the way for Ebbers to begin serving a 25-year prison sentence for his actions as head of the telecommunications company.
Convicted in 2005, Ebbers had argued on appeal that he had been denied a fair trial and that his lengthy prison sentence was unreasonable.
Writing for the court, Judge Ralph K. Winter acknowledged that 25 years is a long sentence for a white collar crime, longer than the sentences routinely imposed by many states for violent crimes, including murder.
But he added that Ebbers actions to hide WorldCom s financial problems were substantial, and had cost investors dearly.
The securities fraud here was not puffery or cheerleading or even a misguided effort to protect the company, its employees, and its shareholders from the capital-impairing effects of what was believed to be a temporary downturn in business, Winter wrote. The methods used were specifically intended to create a false picture of profitability even for professional analysts that, in Ebbers case, was motivated by his personal financial circumstances.
When the extent of the $11 billion accounting fraud was revealed, WorldCom collapsed and declared bankruptcy.
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