Accounting & Tax

Ebbers to Remain Free on Appeal

Judge acknowledges that one of her jury instructions involved a ''generally thorny area of the law.''
Stephen TaubSeptember 8, 2005

Former WorldCom Inc. chief executive officer Bernard Ebbers will remain free while he appeals his conviction, according to press reports.

Ebbers, who was found guilty on nine felony counts in connection with the company’s massive accounting fraud, was sentenced to 25 years in prison. He had been scheduled to report on October 12 to a medium-security facility in central Louisiana.

According to the Associated Press, U.S. District Judge Barbara Jones rejected prosecution arguments that Ebbers should not remain free, since he did not meet the legal standard of raising a “substantial question of law” that could lead to a reversal or reduction of his sentence.

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Ebbers’ attorneys are challenging the judge’s instruction to jurors that they could find their client guilty if they believed he suspected a crime was being committed but intentionally looked the other way, according to the AP. The wire service noted Judge Jones’ acknowledgement that the instruction involved “a generally thorny area of the law” that was worthy of review. By the same token, she also reportedly asserted that the defense arguments “are without merit.”

In other corporate scandal news, as expected, the Securities and Exchange Commission filed its revised complaint against former HealthSouth Corp. chief executive officer Richard Scrushy, according to The Wall Street Journal. The regulator reportedly asserted that Scrushy “induced, ordered, and directed” a $4 billion fraud at the company.

The Journal also reported that the new complaint contains more-detailed accusations against Scrushy than the complaint filed in 2003.