August 01, 2002, 9:09 AM — Two of WorldCom Inc.'s top financial managers are expected to be charged by federal prosecutors this week for their roles in the company's accounting fraud, according to a report in Thursday's The Wall Street Journal newspaper.
Scott Sullivan, former chief financial officer and David Myers, former controller, are expected to be charged with securities, wire and mail fraud as soon as Thursday, the report said.
Sullivan could face a sentence of up to 15 years, the WSJ said, citing "people with knowledge of the matter."
According to the report, prosecutors had set a deadline of Wednesday for a negotiated resolution, but its sources did not believe a plea deal had been reached.
A negotiated plea would save the company money and could turn Sullivan into an important witness against other executives, the report said.
WorldCom announced on June 25 that it was firing Sullivan and admitted that it had disguised expenses of $3.8 billion in its financial results during 2001 and 2002, allowing the company to appear profitable when it was not.
Internal documents show that Sullivan and Myers were told two years ago that their accounting methods were questionable, the WSJ said.