Former WorldCom CFO Sullivan Pleads Guilty to Conspiracy
JACKSON, Miss. – Scott Sullivan (search), former chief financial officer of WorldCom, (search) pleaded guilty Monday to one count of conspiracy to commit securities fraud, Mississippi Attorney General Jim Hood said.
Sullivan entered his plea before Hinds County Circuit Judge Bobby DeLaughter and sentencing was delayed. Sullivan faces up to five years in prison and a fine of $5,000, the attorney general's office said.
Hood said the charge stems from Sullivan's involvement in WorldCom's misrepresentation of billions of dollars in operating expenses, which let the company falsely report earnings.
Hood said Sullivan had waived indictment on the charge.
WorldCom is now called MCI (search). The telecommunications company was headquartered in Clinton, Miss., until 2003.
The Mississippi attorney general's office is working with the U.S. attorney's office for the Southern District of New York in investigating WorldCom financial dealings.
While Sullivan awaits sentencing, his former boss, former WorldCom founder and CEO Bernard Ebbers (search), is awaiting a November trial on charges of securities fraud, conspiracy and falsifying regulatory filings in the company's collapse — the largest bankruptcy in U.S. history.
In April, WorldCom Inc. emerged from Chapter 11 bankruptcy and changed its name to MCI, the long distance phone business it acquired in 1998.
WorldCom filed for bankruptcy in July 2002, citing massive accounting irregularities. The scheme involved falsifying ledgers to record billions of dollars in operating expenses as capital expenses, allowing the company to claim a profit when it was losing money.
Several former executives have pleaded guilty to conspiracy and securities fraud in connection with the company's collapse.