Court Hears Ex-WorldCom CEO Ebbers' Appeal

Ex-WorldCom chief Bernard Ebbers' fraud and conspiracy convictions should be overturned because witnesses that may have exonerated him were kept out of reach by the government, his lawyer argued before a federal appeals court Monday.

"This would have been powerful circumstantial evidence," Reid Weingarten, Ebbers' lawyer, told the three-judge panel.

Weingarten, a lawyer with Washington, D.C.-based Steptoe & Johnson, urged the Second Circuit U.S. Court of Appeals here to set aside the guilty verdicts, saying a lower court should have forced the government to grant immunity to three prospective exculpatory witnesses.

Ebbers was found guilty in March 2005 of orchestrating an $11 billion accounting fraud that drove WorldCom into bankruptcy and was sentenced to 25 years in prison in July 2005.

He is free on bail while pursuing his appeal. Defendants rarely attend their appeal arguments, but the bearded 64-year-old sat through the proceedings and left without comment.

The government should have charged the three former WorldCom employees that could have helped exonerate Ebbers or let them go, Weingarten told the panel, in an emotional appeal.

Instead, the government has kept potential witnesses under investigation, and effectively out of the reach of the defense. The three have never been charged in connection with the WorldCom fraud.

Assistant U.S. Attorney William Johnson, after pointed questioning from one of the the judges, said the government had not taken any steps to further investigate the three since the trial ended, but he insisted there was no effort to manipulate the potential defense witnesses.

"There was certainly no effort ... to keep these witnesses from testifying," Johnson told the court.

The panel also asked the government why Ebbers received such a long prison sentence, with Judge Jose Cabranes noting that "there are many violent criminals who don't get 25 years in prison."

Ebbers' sentence was five times as long as that given to ex-WorldCom financial chief Scott Sullivan, who pleaded guilty to fraud charges and was the government's star witness at Ebbers' trial.

Ebbers was convicted of nine counts of fraud, conspiracy and filing false documents with securities regulators. A federal jury deliberated for eight days in his case.

Weingarten also told the panel that the jury was wrongly instructed that it could convict Ebbers on the basis of so-called "conscious avoidance" of knowledge of the fraud at WorldCom.

The jury was improperly permitted to vote for a conviction even if the telecommunications company's underlying accounting entries fully complied with applicable accounting standards, he argued.

"Somewhere along the line, justice is going to be done in this case, and I hope it's here," Weingarten told reporters after the appeal.