Feds Slap More Charges on Ebbers

The government adds six more claims of filing false statements in its case vs. the WorldCom founder.
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The government beefed up its case against former WorldCom chief Bernie Ebbers.

A federal grand jury handed up six charges of filing false statements Monday. The allegations come on top of the three felony charges Ebbers already faces, following his indictment in March on conspiracy, securities fraud and false-filing claims.

Ebbers

pleaded innocent in March and is due to stand trial Nov. 9. Since March he has been free on $10 million bail.

In their latest statements, federal prosecutors accuse Ebbers of making false filings with the

Securities and Exchange Commission

between September 2000 and March 2002, in an effort to mislead investors about the true health of the telecom giant he headed.

Prosecutors say Ebbers participated in a "scheme to defraud investors, creditors and the public regarding the financial condition and operating performance of WorldCom," according to a Justice Department press release late Monday.

The conspiracy count carries a maximum sentence of five years in jail and a $250,000 fine. The fraud and false statement charges carry a maximum sentence of 10 years and $1 million in fines each.

Ebbers' attorney has said he and his client are "looking forward to our day in court," and that "a fair jury will never conclude that Bernie did anything wrong."

Ebbers was the CEO of WorldCom as the company built itself into a telecom behemoth through some 60 acquisitions. He stepped down in the spring of 2002, just months before the company collapsed under $11 billion of accounting missteps. Ebbers' former right-hand man, ex-financial chief Scott Sullivan, pleaded guilty in March to three conspiracy and securities fraud charges.

Sullivan is expected to cooperate with prosecutors as they seek to prove that Ebbers orchestrated what they say was a two-year-long campaign of outright accounting fraud.

A pretrial conference is scheduled for 6 p.m. EDT Tuesday.

The latest charges come some two months after Ebbers was thrust into the legal spotlight. The government

charged Ebbers March 2 with securities fraud, conspiracy to commit securities fraud and making false filings with the SEC.

That three-count indictment opened 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 original indictment covered the period from September 2000 to June 2002, and cited statements from Ebbers that the government says the executives knew to be false. The government said Ebbers misled investors by falsely misstating earnings and other measures of WorldCom's financial strength.

The U.S. noted 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 voice mail left for Ebbers on June 19, 2001, saying certain numbers were getting "worse and worse."

The news comes as MCI, the successor to WorldCom,

struggles to make a go of the cutthroat telecom industry without the help of court protection. Less than a month after emerging from the nation's largest-ever Chapter 11 case, the big telco earlier this month laid out plans to slash 7,500 jobs.