NEW YORK – Greed, power and pressure corrupted former WorldCom Inc. (search) Chief Executive Bernard Ebbers (search) and drove him to undertake a fraud that cost investors billions of dollars, a U.S. prosecutor said in closing arguments of Ebbers' criminal trial on Wednesday.
Assistant U.S. Attorney William Johnson, portraying Ebbers as a con artist and a liar, urged jurors to convict the one-time executive because there was only one shareholder he cared about: himself.
"WorldCom had truly become WorldCon," Johnson argued. "Bernie Ebbers was the leader of WorldCom and the leader of the con."
• Click here to read the indictment against Bernard Ebbers (FindLaw pdf)
Johnson's closing argument came in the final stages of a six-week trial to determine whether Ebbers orchestrated an $11 billion accounting scandal at WorldCom, the long-distance company he built from a small Mississippi upstart into a telecommunications powerhouse.
"Ebbers faced a choice about admitting to the truth of WorldCom's financial problems or lying to cover them up," Johnson told jurors during his 3-1/2 hour presentation. "He chose to commit a crime, to cover up WorldCom's bad business with a fraud."
Ebbers, who took the witness stand in his own defense, repeatedly denied the charges, saying he was unaware of the fraud and laying the blame at the feet of his former right-hand man and finance chief, Scott Sullivan (search).
Johnson argued on Wednesday that Ebbers lied to jurors. He likened Ebbers' motivation to a "perfect storm" of corruption, saying he was driven to cover up WorldCom's problems by greed, power and worry.
"We all know money can corrupt people. Power can corrupt people. Pressure can corrupt people," Johnson told the jury.
Ebbers, 63, faces up to 85 years in prison if convicted on all counts. He is charged with fraud, conspiracy and filing false documents with regulators.
Federal prosecutors charge that Ebbers masterminded the fraud so that WorldCom could meet Wall Street's profit estimates and slow the decline in its stock price. Most of Ebbers' wealth was tied up in the company's stock -- which he also used to back $400 million in personal loans.
"He had the sort of financial problem that makes you lie in bed at night and say 'How am I ever going to get out of this?"' Johnson said.
In 2002, investigators uncovered the accounting fraud -- which involved hiding expenses and inflating revenue -- and the company was forced to file for bankruptcy protection. Six senior executives were eventually indicted for fraud, and all except Ebbers pleaded guilty.
Often folksy and sometimes combative, the tall, bearded Ebbers worked as a bouncer, basketball coach and milkman before getting into the telecom business. His degree was in education, and his lawyers have emphasized he took no accounting or management courses -- a point they drove home when he took the witness stand.
Sullivan, the former finance chief who has pleaded guilty, implicated his boss during testimony earlier in the trial. Sullivan testified that he warned Ebbers the only way the company could meet its earnings projections would be to make "adjustments" to the financial statements.
Time and again, Ebbers responded by telling Sullivan that "we have to hit our numbers," according to the testimony.
Since no other witness directly tied Ebbers to the fraud, the case will likely boil down to whether jurors believe Sullivan or Ebbers.
Jurors on Wednesday heard Johnson describe Ebbers as a "deliberate and calculated" liar who cost shareholders "literally billions of dollars" by ordering the fraud.
"Ebbers was the general at WorldCom and he directed his lieutenant Scott Sullivan to commit fraud each and every quarter," Johnson said.
Lawyers for Ebbers, who wrapped up their case earlier on Wednesday, are to make their closing argument on Thursday.
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