Sullivan, who pleaded guilty to fraud last year, is the linchpin of the government's case against Ebbers, who is accused of orchestrating the $11 billion fraud that drove WorldCom into bankruptcy in 2002. The company emerged from bankruptcy last spring and is known as MCI Inc.
The government contends Sullivan was acting on orders from Ebbers when he directed WorldCom accountants to hide out-of-control expenses, and that the CEO was driven by keeping WorldCom in the good graces of Wall Street analysts. Defense lawyers for Ebbers have said he was uneducated on accounting matters, preferring to be more of a visionary and cheerleader for the company and leaving the numbers to Sullivan.
Former Attorney General John Ashcroft released this statement in July when the federal indictment was unsealed.
Today, in federal court here in Manhattan, Scott Sullivan pleaded guilty to participating from September 2000 through June 2002 in the illegal scheme with other former WorldCom, Incorporated officers and employees. Mr. Sullivan pleaded guilty to Conspiracy to commit securities fraud; Guilty to securities fraud; and guilty to false filing with the Securities & Exchange Commission.
Scott Sullivan faces a maximum sentence of 25 years in prison. Scott Sullivan has agreed to cooperate.
Of course, due to his cooperation, Sullivan will get nowhere near that amount of time. He was also hit with an SEC enforcement action, which he conceded, meaning he will never be allowed to serve as an Officer and Director of a public company, or practice as an accountant before the SEC.
Here's a list of Congressman and Senators who accepted money from Sullivan, as late as 2002. Worldcom was under investigation in 2002, and the illegal activity by Worldcom and Sullivan occurred between 2000 and 2002. One of those to whom Sullivan contributed on several occasions, including in 2002, was Mississippi Congressman Charles Pickering (whom Bush later snuck on the 5th Circuit as a recess appointment after the Senate Judiciary Committee refused to confirm him. Pickering has since resigned .) Worldcom began in Mississippi as a long distance company and that's where Ebbers kept the company's headquarters. I wonder what Pickering knew about Worldcom's troubles and when he knew it.
Sullivan was represented by Miami superlawyer Roy Black. For now, it looks like Sullivan is being represented by the Justice Department, although his lawyers likley will step back in when it's time for the Government to decide how much in years off Sullivan's prison sentence it's willing to pay for his testimony against Ebbers.