Updated from 1:09 p.m. EST

The government charged former WorldCom chief Bernie Ebbers with securities fraud, conspiracy to commit securities fraud and making false filings with the Securities and Exchange Commission.

The three-count indictment matches the charges lodged against his former righthand man, ex-financial chief Scott Sullivan. Sullivan pleaded guilty Tuesday to three felony counts, promising to cooperate with prosecutors making a case against Ebbers. The SEC filed concurrent civil charges Tuesday.

The criminal charges, unveiled Tuesday afternoon by Attorney General John Ashcroft, open a new chapter in the government's prosecution of the scandals that have littered the corporate landscape in recent years. WorldCom was a stock market favorite as Ebbers led it on a massive acquisition spree in the late 1990s before the company collapsed in 2002 under a heap of bookkeeping missteps.

The 32-page indictment, which covers the period from September of 2000 to June of 2002, cites statements from Ebbers and Sullivan that the government says the executives knew to be false. Ashcroft said Ebbers and Sullivan misled investors by falsely misstating earnings and other measures of WorldCom's financial strength.

The U.S. notes the executives' claims that WorldCom's earnings would grow 21% in the third quarter of 2002, for instance. The company ended up filing for bankruptcy that quarter. The government also cites a voicemail Sullivan left for Ebbers on June 19, 2001, saying certain numbers were getting "worse and worse."

The evidence supporting the indictment doesn't appear to include any direct communications from Ebbers to Sullivan, however. "We do not believe that a fair-minded jury will conclude that Bernie Ebbers ever acted with criminal intent," Ebbers' attorney, Reid Weingarten, said in a statement Tuesday.

In a late-morning arraignment in Manhattan federal court, Sullivan pleaded guilty to fraud, conspiracy to commit fraud and making false statements. The executive told the court he regretted his actions, which he described as "participating along with other members of WorldCom senior management to draw a false picture of the company's results."

Sullivan, who said the conspiracy reached "the highest levels" of WorldCom management, is now cooperating with prosecutors probing the company's collapse. Sullivan could face up to 25 years in jail and a fine of $2.25 million.

Ebbers left WorldCom in 2002, just months before the telecom behemoth tumbled into the nation's largest-ever Chapter 11 case. The company collapsed that summer under some $11 billion in accounting irregularities. On Tuesday, Sullivan described his role in those missteps, saying he sought to keep the company in line with Wall Street's expectations and that he didn't take his actions for personal gain.

The government's failure to bring charges against Ebbers had drawn vocal criticism.

A bankruptcy court-appointed panel headed by former Attorney General Richard Thornburgh concluded that Ebbers created an environment that led to the notorious fraud at the company and was aware of certain practices to inflate reported revenue.

Sullivan, who was fired after the accounting scandal emerged in 2002 and who was scheduled to go on trial in April, had been indicted on fraud and conspiracy charges, many of which related to filings made with federal regulators.

Last year, Oklahoma charged WorldCom, Ebbers and five other former executives with violating state securities laws by knowingly giving false information to investors. The state later dropped the charges against Ebbers, saying they would later be refiled.

WorldCom, now doing business as MCI, is expected to emerge from bankruptcy proceedings this spring under the leadership of CEO Michael Capellas.

Tuesday's developments come in the wake of a busy season for federal prosecutors combing the corporate shenanigans beat. Earlier this year two other former top execs at a high-profile corporate collapse, Andrew Fastow and Jeffrey Skilling of Enron, were charged. Meanwhile trials continue apace for ex-CEOs at Martha Stewart Living Omnimedia, Tyco and Adelphia.

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