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Former Worldcom Top Executive Pleads Innocent

BY Admin  September 4, 2002 at 2:45 PM EDT

Sullivan, 40, entered his plea in Manhattan federal court, and was released on a $10 million bond.

Buford Yates, WorldCom’s former general accounting director, also pleaded not guilty to alleged conspiracy in the accounting scheme. He was released on personal recognizance with a $500,000 bond.

According to the indictment, the scheme to hide WorldCom’s expenses started in October 2000 and continued until this June, shortly before the nation’s second-largest long distance carrier filed for bankruptcy in July. The bankruptcy filing — the world’s largest — came as the company grappled with debts of some $40 billion.

Sullivan and Yates were indicted last week on seven counts, including securities fraud, conspiracy to commit securities fraud and submitting false filings to the Securities and Exchange Commission.

The government is continuing its probe into the company’s accounting misstatements, which total $7.68 billion. Prosecutors expect more charges to be leveled, possibly against other defendants.

“The government is continuing its investigation and we do plan to supersede at some point to add charges to the same scheme and potentially to add defendants,” Assistant U.S. attorney David Anders told U.S. District Judge Barbara Jones.

The government has implicated WorldCom’s former controller David Myers and two other WorldCom accounting executives as unindicted co-conspirators. Myers, who was arrested last month, is currently free on a $2 million bond. Attorney David Anders said Tuesday he was attempting to reach a plea agreement with the former controller.

A trial date for the case has not yet been set, pending the filing of additional charges.