Corp-Ethics.com - Report: Worldcom's ex-boss loses appeal

Company	WorldCom [Company Info]
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Date	Issue	Title
28th Jul 2006	Other Issue	Worldcom's ex-boss loses appeal

Report

Former Worldcom boss Bernard Ebbers has lost his appeal against his conviction and 25-year prison sentence for fraud and conspiracy.

A federal appeals court in New York on Friday upheld the guilty verdict passed by the jury in Mr Ebbers' original trial back in March 2005.

The convictions against Mr Ebbers relate to his part in an $11bn (£6bn) accounting fraud at the telecoms firm.

The appeals court verdict may now lead to Mr Ebbers starting his jail term.

Since last year the 64-year-old has remained on bail pending the appeal.

The three appeal judges rejected Mr Ebbers' contention that his trial had been "fundamentally flawed", and instead upheld the trial jury's verdict.

"The methods [Mr Ebbers] used [at Worldcom] 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," wrote Judge Ralph Winter of the US Second Circuit Court of Appeals.

"Given Congress' policy decisions on sentences for fraud, the sentence is harsh but not unreasonable," the judge added.

Mr Ebbers' lawyer, Reid Weingarten, said in a statement that "we are deeply disappointed" by the decision.

Mr Weingarten promised to "keep fighting" until Mr Ebbers is vindicated.

Worldcom's 2002 collapse was the biggest bankruptcy in US corporate history.

Some 20,000 workers lost their jobs, while shareholders lost about $180bn, when the company filed for bankruptcy protection.

Born in Edmonton, Canada on 27 August, 1941, Bernard Ebbers worked as a basketball coach, teacher and warehouse manager before running a chain of motels from which he launched his stellar telecoms career.

He snapped up rivals and took advantage of the end of AT&T's monopoly which enabled him to offer phone deals at bargain prices.

With his fortune rapidly growing, in 1995 he paid £1.2bn for WilTel Network Services and changed its name to WorldCom.

By mid-1999 WorldCom shares reached an all-time high and Mr Ebbers became the darling of Wall Street.

But in 2001, his attempts to buy larger rival Sprint were thwarted by regulators and worries about WorldCom's mounting debt began to emerge.

Mr Ebbers quit the firm in 2002 after admitting borrowing money from WorldCom to cover losses he incurred in buying its shares.

In the same year WorldCom went bankrupt.

It emerged from bankruptcy in 2004, renaming itself MCI.

MCI has since been acquired by Verizon Communications.

Other Reports on WorldCom
Date	Issue	Company	Report
11th Aug 2005	Fraud Investigation	WorldCom	Ex-Worldcom finance chief jailed
13th Jul 2005	Fraud Investigation	WorldCom	Worldcom's ex-boss gets 25 years
15th Mar 2005	Fraud Investigation	WorldCom	Ebbers guilty of Worldcom fraud
27th Jan 2005	Fraud Investigation	WorldCom	Ebbers pleads Worldcom ignorance
19th Jan 2005	Fraud Investigation	WorldCom	WorldCom trial starts in New York
6th Jan 2005	Other Issue	WorldCom	WorldCom agrees $54m payout

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