MCI Facing Criminal Charges in Oklahoma -- Reports
MCI's
hopes for a speedy emergence from bankruptcy hit another speed bump Wednesday with news Oklahoma will run an end-around past federal regulators and charge the company with criminal fraud in connection with its accounting scandal.
The charges will be formally announced Wednesday, reports said.
The former
WorldCom
had hoped to avoid further legal entanglements in the run-up to its reorganization, a confirmation hearing for which is scheduled for Sept. 8. It has already settled fraud charges with the
Securities and Exchange Commission
and is being investigated by the U.S. attorney in New York.
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News of the Oklahoma charges broke the same day as a court-appointed inspector delivered an
ambitious plan to revamp MCI's corporate governance in the post-Bernard Ebbers era. Ebbers, WorldCom's founder, was ousted following revelations the company had improperly booked billions of dollars of phony profits and is currently under federal investigation.
Ebbers and several others will be named in the charges unsealed Wednesday,
The Wall Street Journal
reported.
MCI released a statement through its spokesman, saying: "While we have not received any details from the state attorney general, the fact that some former executives committed fraud is not new news. They have been out of the company for months."
Oklahoma officials wouldn't comment ahead of the news conference, but the
Journal
quoted Attorney General Drew Edmondson saying in May: "The idea that WorldCom can waltz through the bankruptcy proceedings and walk away without a problem is not a very palatable idea to this office."
