Former execs may save WorldCom from charges

ITworld.com –

WorldCom Inc.'s cooperation with investigators and its internal probe into its accounts, together with the plea negotiations of former executives Scott Sullivan and David Myers, are likely to dissuade prosecutors from filing charges against the company itself, according to the online edition of The Wall Street Journal (WSJ) Friday.

The U.S. Federal Bureau of Investigation (FBI) is considering the effect of an indictment of the company on employees, consumers and creditors, according to the report.

Former WorldCom Chief Executive Officer Bernard Ebbers may face charges in a second round of federal action, although this may not happen for some weeks, the report said.

Sullivan and Myers surrendered to investigators on Thursday morning and were charged with securities fraud, conspiracy to commit securities fraud and making false filings with the U.S. Securities and Exchange Commission (SEC), the WSJ said.

They were allowed to surrender, rather than being arrested at their apartments, because of continuing plea negotiations, the report said. These talks are closer to completion with Myers than Sullivan, according to the report.

In a seven-point complaint, Sullivan and Myers are accused of reallocating US$3.85 billion in operating expenses, over five quarters of financial results, from the income statement to the balance sheet. This allowed the money to be classified as capital expenditure and deducted gradually, the report quoted the complaint as saying.

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