NEW YORK – Former WorldCom Inc. chief executive Bernard Ebbers (search) Tuesday was found guilty on all counts of conspiracy, securities fraud and filing false documents in the $11 billion accounting scheme that bankrupted the telecommunications giant.
A federal jury in Manhattan deliberated for eight days before returning guilty verdicts on one count of conspiracy, one count of securities fraud and seven counts of false regulatory filings — crimes carrying up to 85 years in prison.
The tall, bearded Ebbers, who worked as a bouncer, basketball coach and milkman before getting into the telecommunications business, sat with his hands folded as the verdict was read and showed little reaction. He then turned to hug his wife, who was crying.
The conviction comes more than two years after an internal auditor began asking questions about curious accounting at WorldCom. Six senior WorldCom executives were indicted for fraud and the company was forced to file for bankruptcy protection in 2002.
Ebbers was the only one of those executives to plead not guilty. Sentencing will take place on June 13.
Ebbers' lawyer said after the verdict that he would appeal.
"The fight will continue," Reid Weingarten said. When asked how his client reacted to the verdict, Weingarten said, "I'm sure he's devastated."
Weingarten said the case was "riddled with reasonable doubt." "We profoundly disagree with the verdict," he said.
Prosecution testimony at the six-week trial portrayed Ebbers, 63, as obsessed with keeping WorldCom's stock price high, panicked about $400 million in personal loan that were backed by his shares in the company.
Ebbers himself took the witness stand late in the trial, insisting that he was unfamiliar with the details of accounting and knew nothing about the fraud taking place on his watch.
The prosecution's star witness was former Chief Financial Officer Scott Sullivan, who testified that Ebbers pressured him into falsifying financial records at WorldCom from 2000 to 2002.
"I told Bernie, `This isn't right,"' Sullivan said of one plan to create $133 million in revenue by drawing down reserve accounts. "He just stared at it, and he looked up at me and he said, `We have to hit our numbers."'
Ebbers gambled by taking the witness stand. He directly disputed the testimony of Sullivan, saying he became aware of the fraud only in the summer of 2002, after he was asked to leave WorldCom.
"He's never told me he made an entry that wasn't right," Ebbers said of Sullivan. "If he had, we wouldn't be here today."
The conviction completes a staggering fall for Ebbers, who took a small long-distance company in Mississippi and merged with or acquired ever-larger companies, earning him accolades and the nickname Telecom Cowboy.
He still faces civil litigation, including from the company, which backed up his $400 million in personal loans when Bank of America demanded more and more collateral as the stock price fell.
WorldCom, which was based in Clinton, Miss., was driven into bankruptcy — the largest in U.S. history — in the summer of 2002. It has since re-emerged as MCI Inc., based in Ashburn, Va.
The company struck a $750 million settlement with federal regulators to repay aggrieved investors, a small sum compared to the tens of billions of dollars of market capitalization that evaporated in the scandal.
Twelve former directors of the company, plus some investment banks that underwrote WorldCom securities and auditing firm Arthur Andersen, also face a civil trial brought by angry investors. That trial is set for late March.
In winning a conviction against Ebbers, federal prosecutors in Manhattan rung up another victory in a remarkable string of white-collar prosecutions that began in the summer of 2002.
Martha Stewart, Adelphia Communications founder John Rigas and former dot-com banking star Frank Quattrone were all found guilty during that stretch — with the same prosecutor, David Anders, handling both Quattrone and Ebbers.
The prosecutors have also wrung guilty pleas from countless other executives, including ImClone Systems founder Sam Waksal and five other former WorldCom officials who agreed to cooperate against Ebbers.
In the WorldCom case, five executives, including Sullivan, pleaded guilty and cooperated with prosecutors. They have yet to be sentenced.
Reuters and the Associated Press contributed to this report.