Accounting & Tax

Ebbers Sentenced to 25 Years

WorldCom's former chief executive will likely spend the rest of his life in a federal prison.
Stephen TaubJuly 13, 2005

Bernard Ebbers, 63, was sentenced to 25 years in prison for his role as the “instigator of the fraud” — in the words of the judge — that led to the largest accounting scandal and bankruptcy in U.S. history. The $11 billion fraud at WorldCom Inc. caused shareholders to lose $2.2 billion.

Jurors, who had found WorldCom’s former chief executive officer guilty on nine felony counts, apparently did not buy his defense that he had no idea a fraud was being committed at the telecommunications giant, now known as MCI Inc. (See also our recent story What Does Your CEO Really Know?)

Although Ebbers’s term in prison would have been 30 years based on federal sentencing guidelines, U.S. District Judge Barbara Jones reduced that term to 25 years, citing his charitable work, according to CNBC. He has reportedly given $96 million to charity.

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Ebbers was composed when he heard the judge’s sentence and put his head in his hands, according to CNBC. He is likely to serve virtually the entire 25 years since there is no parole in the federal system. Ebbers, who is appealing his conviction, was ordered to report to prison on October 12.

Earlier this week, a different judge approved a settlement that called for Ebbers to relinquishing nearly all of his considerable personal wealth — estimated at around $45 million — to settle a shareholder lawsuit.

Ebbers also must forfeit his Mississippi mansion and extensive real estate holdings, according to CNN. His wife will be allowed to keep what published reports call “a modest home in Mississippi” and approximately $50,000.

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