Today the U.S. Court of Appeals for the Second Circuit upheld the conviction and prison sentence of former WorldCom CEO Bernard Ebbers. The 64-year-old defendant was convicted in 2005 of nine counts of conspiracy, securities fraud, and false SEC filings. He received a 25-year prison sentence, which all but assures that he will die in prison.
WorldCom’s demise was an $11 billion accounting fraud that included improper capitalization of operating costs, among other things. It sent WorldCom, a company with stock previously valued at $180 billion, into bankruptcy. Ebbers’s defense was that the CFO, Scott Sullivan, and his subordinates committed the fraud without his knowledge.
Ebbers’s attorney argued that the sentence was excessive and that Ebbers did not receive a fair trial because potential defense witnesses weren’t offered immunity from prosecution in exchange for their testimony. The witnesses said they would use the fifth amendment to avoid testifying.
Ebbers has been free while the appeal was pending, and is expected to be ordered to prison soon.