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Saturday, July 12, 2014

Former WorldCom exec gives guilty plea, blames superiors

Friday, September 27, 2002

NEW YORK -- WorldCom's former controller pleaded guilty to securities fraud Thursday, saying he was told by "senior management" to falsify records in what became the largest corporate accounting scandal in U.S. history.

David Myers, 44, entered the plea in U.S. District Court after telling Judge Richard Casey he wanted to waive his right to be indicted on the charges. It was the first admission of guilt in the multibillion-dollar scandal.

Prosecutors say Myers and Scott Sullivan, the former chief financial officer at WorldCom, directed employees to falsify balance sheets to hide more than $3.8 billion in expenses. The deception enabled WorldCom to report a profit when it was actually losing money, according to regulators.

"I combined with others ... to assist in the commission of fraud," Myers told the judge.

Casey asked Myers if he had committed the three crimes named in court papers: conspiracy, securities fraud, and false filings to the Securities and Exchange Commission.

"Yes, sir, I did," Myers answered.

Myers faces up to 10 years on the most serious charge. He is cooperating with the authorities against his former bosses, Janis said.

WorldCom, which owns the nation's No. 2 long-distance telephone company MCI, became the biggest corporate bankruptcy in U.S. history in July. The company has since revised the amount of accounting improprieties up to $7.1 billion, and new reports said the final total may reach $9 billion.

Prosecutors say the fraud began when Myers and Sullivan ordered WorldCom accounting executives Buford Yates, Betty Vinson and Troy Normand to record billions in operating expenses as capital expenses.


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