Ebbers gets 25-year term in $11b fraud

NEW YORK -- A federal judge yesterday sentenced former WorldCom Inc. chief executive Bernard Ebbers to 25 years behind bars for his role in the nation's largest accounting fraud, the harshest prison term yet to flow from corporate scandals that rocked the stock market three years ago.

The once-brash mogul, 63, wept and sniffled as US District Judge Barbara Jones imposed the sentence in a packed courtroom. Ebbers, a former basketball coach who built a telecommunications empire from scratch, must serve 85 percent of the prison term -- making him eligible for release in about two decades. The judge recommended he be sent to a low-security facility in Yazoo City, Miss., so relatives and friends who live nearby could visit.

''Although I recognize . . . this is likely to be a life sentence for Mr. Ebbers, I find anything else would not reflect the seriousness of the crime," the judge said.

Ebbers, who maintains his innocence, waived his right to speak. He hunched over and clutched the back of his chair after the two-hour proceeding ended. His wife, Kristie, stepped forward and cried on his shoulder. Defense lawyers swiftly vowed to appeal and sought to delay his Oct. 12 deadline to report to prison.

''We're not giving up," lawyer Reid Weingarten told reporters outside the courthouse. ''Bernie Ebbers is not giving up. We're going to pursue an appeal as vigorously as possible."

Prosecutors opposed efforts that would allow Ebbers to remain free pending the results of the appeal. The judge, who expressed doubts about the likelihood of overturning the March conviction on securities fraud, conspiracy, and false-statements charges, nonetheless ordered the government to file court papers within three weeks responding to the defense request.

''This case is almost the standard for large frauds," Assistant US Attorney David Anders told the judge. ''It's the case defendants for years to come will point to."

The fraud at WorldCom ultimately topped $11 billion and led to the country's biggest bankruptcy filing, in July 2002. Nearly 17,000 employees lost their jobs as a result of the scheme to bury expenses and inflate revenue, according to a probation report. The Ashburn, Va., company has since emerged from bankruptcy protection and renamed itself MCI Inc.

Last month Ebbers agreed to pay $5.5 million cash and to hand over his Clinton, Miss., mansion and other assets worth as much as $40 million to resolve claims filed by WorldCom shareholders who lost billions of dollars when the company collapsed. His wife will be allowed to keep a smaller Mississippi house, $50,000 in cash, and a retirement account under the terms of the deal.

Defense lawyers had pleaded with the judge for leniency, citing Ebbers's heart condition and more than $100 million he gave to charity

''It seems quite clear to me that Mr. Ebbers was really a leader of criminal activity in this case," Judge Jones said.

The judge said testimony showed that Ebbers repeatedly misled investors and employees and filed phony financial information with the Securities and Exchange Commission.

Disclosures about extensive fraud at WorldCom in June 2002 devastated investor confidence and prompted Congress to pass legislation increasing criminal penalties for business fraud.

The company and its founder, Ebbers, since have become synonymous with that era.

It is a remarkable fall for the Canadian-born Ebbers, who graced the cover of business magazines and boasted that he would reshape the telecommunications sector.