WorldCom ex-CEO sentenced for fraud
Ebbers, 63, is given 25 years in prison in corporate scandal; Profits were inflated over years
Yesterday, Ebbers became a symbol of a different kind when a federal judge sentenced the former WorldCom Inc. chief executive to 25 years in prison - essentially a life sentence - for spearheading the largest accounting fraud in U.S. history.
In a bid for leniency, defense lawyer Reid Weingarten told U.S. District Court Judge Barbara Jones that Ebbers never intended any harm and did not do anything to enrich himself.
But former WorldCom salesman Henry J. Bruen Jr., granted permission by the judge to address the court, spoke of the "untold human carnage" that he and thousands of others suffered as they lost their jobs and struggled to find work after disclosure of WorldCom's $11 billion accounting fraud.
"This was sheer hell, and I was totally devastated physically and emotionally from the experience," said Bruen, 47.
Gino Cavallo, who still works for WorldCom, sat in the courtroom as an observer. Cavallo said he lost tens of thousands of dollars when the stock sank after disclosure of the accounting fraud.
"He defrauded us, and we wanted to see justice done," Cavallo said outside court.
In addition to thousands of jobs lost, prosecutors have contended that Ebbers' actions cost WorldCom shareholders more than $2 billion in losses.
Weingarten, his voice at times cracking with emotion, told the judge that Ebbers was unlike other executives accused of misdeeds. Ebbers didn't loot WorldCom as a personal "piggy bank," Weingarten said, and often made charitable donations anonymously.
"There are no plaques on the wall that Bernard J. Ebbers built this gymnasium or built that educational facility for disadvantaged children," Weingarten said. "That's not who he is."
Jones said she spared Ebbers from a maximum penalty of 30 years to life because of his charitable work and his heart condition. But Jones said the damage Ebbers inflicted on investors demanded a term of at least 25 years.
"A sentence of anything less would not reflect the seriousness of this crime," Jones said.
Ebbers did not speak in court and refused reporters' questions afterward.
Jones ordered Ebbers to report to prison Oct. 12 and said she would recommend a low-security compound in Yazoo City, Miss. The judge did not immediately rule on a defense request that Ebbers remain free pending an appeal.
Two weeks ago, Ebbers agreed to give aggrieved investors almost all his remaining cash and assets - with an estimated value of up to $45 million - in what legal experts viewed as a bid to win leniency from the judge.
"It bought him nothing," said attorney George B. Newhouse Jr., a partner at Thelen Reid & Priest in Los Angeles.
The sentences in a series of recent high-profile white-collar crime cases have ranged from the 10-month term (half of that under house arrest) handed down to lifestyles entrepreneur Martha Stewart, to the 20-year sentence given to Timothy Rigas, former chief financial officer of Adelphia Communications Corp. Rigas' father, Adelphia founder John Rigas, was sentenced to 15 years.
The Ebbers sentence stood in stark contrast to those imposed on the last generation of corporate felons who were prosecuted in Wall Street's insider-trading scandal of the late 1980s and early 1990s, said Kirby Behre, a partner at law firm Paul Hastings Janofsky & Walker.