article

WorldCom’s Yates Pleads Guilty in Accounting Scandal

Buford Yates Jr. on Monday became the second WorldCom Inc. executive to admit participation in one of the largest accounting frauds in U.S. history.


Yates, WorldCom’s former director of general accounting, pleaded guilty to one count of conspiracy and one count of securities fraud before a U.S. Magistrate judge in Manhattan. Yates could be sentenced for up to 10 years behind bars on the securities fraud count, while conspiracy carries a maximum sentence of five years in prison. Sentencing is scheduled for Jan. 9.


Last month David F. Myers, the former controller of WorldCom, pleaded guilty to one count of conspiracy, one count of securities fraud and making false filings with the Securities and Exchange Commission. He faces sentencing the day after Christmas.


Meanwhile, Scott D. Sullivan, the former chief financial officer of the bankrupt telecom giant, has pleaded not guilty to conspiracy and securities fraud charges in the $7.2 billion accounting scandal.


With the telecommunications industry already in shambles, this year WorldCom added another layer to the disarray by revealing the company had eluded losses over five quarters, artificially posting nearly $4 billion in earnings, by booking expenses as capital expenditures.


In an indictment federal prosecutors allege two other WorldCom executives played a part in the accounting scandal: Betty L. Vinson, director of management reporting and Troy M. Normand, director of legal entity accounting. The prosecutors have not filed any charges against WorldCom’s former chief executive, Bernie Ebbers, who transformed the company from a modest operation based in Mississippi to one of the largest communications providers in the world.






Leave a comment

Your email address will not be published. Required fields are marked *

The ID is: 69461