Accounting & Tax

Sullivan Gets Five Years

Worldcom's former chief financial officer was the ''key factor'' in the case against Bernard Ebbers, says the sentencing judge, without whom Ebbers...
Stephen TaubAugust 11, 2005

Former WorldCom Inc. chief financial officer Scott Sullivan has been sentenced to five years in prison and three years of probation for his role in the telecom company’s $11 billion accounting fraud.

Sullivan, who pleaded guilty in March 2004 to conspiracy, securities fraud, and filing false documents with the Securities and Exchange Commission, had faced as much as 25 years. The former finance chief, of course, is widely credited for playing a major role in helping the government convict his erstwhile boss, Bernard Ebbers. Last month, Worldcom’s former chief executive officer was sentenced to 25 years in prison.

U.S. District Judge Barbara Jones stated that Sullivan’s cooperation “was the key factor in the case of Mr. Ebbers, without which Mr. Ebbers likely could not have been indicted, much less convicted, in the fraud at WorldCom,” according to The Wall Street Journal.

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The judge acknowledged that “Mr. Sullivan’s offenses were of the highest magnitude,” according to Bloomberg. “Mr. Sullivan was, if you will, the day-to-day manager of the scheme.” According to several reports, the judge said that in sentencing Sullivan, she also took into consideration the fact that his wife is in poor health and has been hospitalized nine times for emergencies this year alone.

“I made horrible decisions,” Sullivan told the court, according to the Associated Press. “It was a misguided effort to save the company. … I ask for leniency so I can get back to my family as soon as possible.”

Sullivan recently agreed to forfeit his Boca Raton estate and his retirement fund to settle a class-action lawsuit. He also agreed to surrender his 401(k) account, which would reportedly be worth about $200,000 after taxes and penalties. He will be left with some household goods, “nearly worthless” business investments, and some other retirement funds unrelated to WorldCom, according to press reports at the time.