Worldcom's Sullivan to Serve Five Years
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Scott Sullivan, the accounting whiz who helped engineer the $11 billion fraud at WorldCom, was sentenced today to five years in prison. The sentence was considerably shorter than the one given to WorldCom CEO Bernard Ebbers last month, but the judge noted that Sullivan had cooperated with prosecutors and that his testimony was critical to the case. Here's NPR's Jim Zarroli.
JIM ZARROLI reporting:
Scott Sullivan told the judge that he'd barely slept in two days and that, because of his emotional condition, he wanted to read a statement instead of speaking to her directly. He then said how sorry he was for his role in the WorldCom fraud, how he'd chosen the wrong road and made horrible mistakes. But he said by lying to investors about the company's financial condition, he was merely trying to help WorldCom withstand what he thought were temporary problems.
In response, Judge Barbara Jones noted that Sullivan had been the architect of the WorldCom fraud and that he'd waited longer than the other defendants to cooperate with the government. But once he did, she said, he was a model witness, who pointed prosecutors to evidence they wouldn't have had otherwise. And she noted he had been pressured by his boss, Bernard Ebbers, to carry out the fraud. For that reason, she was giving him just five years in prison and three years' probation. In contrast, Ebbers got 25 years.
The sentence was an enormous comedown for Sullivan, whom the press once celebrated as an accounting genius. In his heyday, Sullivan was seen by Wall Street analysts as the brains behind the rise of WorldCom, which grew from a small Mississippi long-distance company to one of the world's largest telecommunications empires. Many of those in the courtroom today said it was only fair that Sullivan had received some jail time. Henry Bruin is a former WorldCom sales executive.
Mr. HENRY BRUIN (Former WorldCom Sales Executive): He was the principal architect and the implementer of this heavy-handed scheme and fraud.
ZARROLI: But others noted that without Sullivan's testimony, prosecuting Ebbers would have been a lot tougher. To Dolores Denbis Bittelman(ph), it was hard to feel good about the sentence. Bittelman lost $20,000 in the WorldCom fraud and is now part of a class-action suit against the company. But watching Sullivan in court today, she couldn't help feeling sorry for him.
Ms. DOLORES DENBIS BITTELMAN (Class-action Suit Participant): That's the tragedy because his talent, the education, the intelligence has gone into this terrible event that's ruined his life, and I think it was because of the pressures of the situation. I can't say that any of us can feel that we would do better in the same situation.
ZARROLI: Sullivan will begin his sentence in 90 days at a federal prison that hasn't yet been determined. Christopher Bebel, a former federal prosecutor. says Sullivan will probably have to serve out most of the sentence.
Mr. CHRISTOPHER BEBEL (Former Federal Prosecutor): However, as he nears the point of release, he will be placed in a halfway house-type facility, where he will have considerable liberties.
ZARROLI: Sullivan did not receive a fine today, but he is having to pay dearly for the fraud at WorldCom. The company's collapse left his retirement account devastated, and he's had to sell his $11 million Florida mansion as part of a settlement and a lawsuit brought by investors. His attorney said today that Sullivan, who once received multimillion-dollar bonuses, now has virtually no assets left. Jim Zarroli, NPR News, New York.
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