Former WorldCom CFO booked on criminal charges in Oklahoma
Wednesday, September 17th 2003, 12:00 am
By: News On 6
OKLAHOMA CITY (AP) _ MCI's former chief financial officer pleaded innocent Wednesday to charges he violated Oklahoma securities laws in an $11 billion accounting scandal that led to the biggest bankruptcy in U.S. history.
Scott Sullivan, former chief financial officer for the long-distance company then known as WorldCom, was booked earlier in the day and then released after posting $50,000 bail. He was fingerprinted and photographed as part of the booking process.
The company and five other executives, including former chief executive Bernie Ebbers, are also charged with defrauding Oklahoma investors by understating $11 billion in expenses to inflate reported profits.
Sullivan and four of the executives have also been charged in federal court, but the Oklahoma charges are the first brought against the company and Ebbers.
``The charges are unwarranted as a matter of law, and unfair as a matter of practicality,'' Roy Black, Sullivan's attorney, said after Sullivan entered his plea before Oklahoma County District Judge Russell Hall.
Each of the six executives charged by Oklahoma are accused of 15 felony counts, each carrying up to a 10-year prison sentence and a $10,000 fine.
Ebbers also pleaded innocent to the charges Sept. 3 and was released on $50,000 bail.
The charges, brought by Oklahoma Attorney General Drew Edmondson, allege that WorldCom's falsified profit reports led Oklahoma investors to lose millions, including a $64 million hit to state pension funds invested in the company.
Oklahoma's effort to prosecute the company and executives has vexed federal agencies, which worry the state's case could undermine their own efforts to bring federal charges in the scandal.
The state's case also charged former executives David Myers, Buford Yates Jr., Betty Vinson and Troy Normand, who have pleaded guilty to federal charges and are helping federal prosecutors.
No dates have been set for their initial court appearances in Oklahoma.
Despite the ongoing prosecutions and investigations, MCI is preparing to clear its financial name in bankruptcy court, where the company's financial reorganization plan is nearing approval.
Hearings on the plan, which would pay back just $5 billion of the company's $41 billion debt, began last week and are expected to conclude later this month. If all continues to go smoothly, MCI could emerge from the biggest bankruptcy in U.S. history by year-end or in early 2003.