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Former WorldCom exec facing new charges

Thursday, April 17, 2003

NEW YORK -- The government brought new bank fraud charges against former WorldCom chief financial officer Scott Sullivan on Wednesday, accusing him of lying on financial statements to secure $4.25 billion in credit for the company.

Sullivan has already pleaded innocent to securities fraud and other charges alleging he ordered accountants to move operating expenses off the books, making the telecommunications giant appear profitable when it was losing money.

Sullivan was CFO of Mississippi-based WorldCom when the company allegedly carried out a $9 billion accounting fraud, the largest in U.S. history.

The latest charges could signal that plea bargain talks with Sullivan have broken down as prosecutors consider a case against former WorldCom CEO Bernard Ebbers, said Robert Mintz, a former federal prosecutor.

"Sullivan by all accounts would be a critical witness if the government hopes to bring charges against Bernie Ebbers," Mintz said.

Sullivan faced 65 years in possible prison time on the original charges; the new charges could add 120 years.

Sullivan's lawyer, Irv Nathan, did not immediately return a call seeking comment. He has said previously that his client has been made a scapegoat.

The latest indictment says Sullivan obtained loans in 2001 by providing banks financial statements that hid WorldCom costs and lowered its publicly reported expenses.

Sullivan, 40, of Boca Raton, Fla., has been free on $10 million bail on the original charges. His next hearing is set for Tuesday.


On the Net:

SEC: http://www.sec.gov

WorldCom: http://www.worldcom.com


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