Although an investigation continues into the $11 billion accounting fraud at WorldCom, prosecutors will not press criminal charges against its successor, MCI Inc., according to press reports.
A major reason that MCI and government officials were able to reach a non-prosecution agreement is because the company has purged almost every employee “who played even a tangential role” in the scandal, according to a statement from David Kelley, the U.S. attorney for the Southern District of New York.
“The public interest has been sufficiently vindicated by the successful criminal prosecution of the principal criminal wrongdoers — Bernard Ebbers and Scott Sullivan,” Kelley’s office said in a statement. He also noted that MCI “has undertaken significant remedial measures.”
Verizon Communications, which is on the verge of an $8.5 billion acquisition of MCI, has also agreed to ensure that the company complies with the terms of the non-prosecution deal after the merger is completed, according to Reuters.
“The U.S. Attorney’s decision to conclude this investigation allows us to close another chapter in the successful turnaround of our company,” MCI general counsel Stasia Kelly said in a statement.
WorldCom’s former chief executive officer, Bernard Ebbers, was sentenced to 25 years in prison for orchestrating the company’s accounting fraud. Former chief financial officer Scott Sullivan, who pleaded guilty to fraud charges and testified against his onetime boss, was sentenced to five years. MCI has already agreed to a $750 million settlement with the Securities and Exchange Commission.