New charges coming in WorldCom case

The US government plans to add additional charges and possibly new defendants to its case against the officials behind WorldCom's...

The US government plans to add additional charges and possibly new defendants to its case against the officials behind WorldCom's collapse, prosecutors said.

Former chief financial officer Scott Sullivan and former director of General Accounting Buford Yates yesterday pleaded not guilty at the hearing to charges of securities fraud, conspiracy to commit securities fraud and making false filings with the US Securities and Exchange Commission.

Sullivan, charged in an earlier complaint at the end of July, was already free on bail of $10m (£6.4m). Bail for Yates, who was not named in the initial complaint, was set at $500,000 (£318,204).

Sullivan and Yates are accused of helping WorldCom hide billions in expenses to create the illusion of profitability. Soon after the accounting irregularities were revealed, WorldCom filed the largest Chapter 11 bankruptcy in US history.

Several WorldCom executives not indicted but named in court papers by prosecutors as co-conspirators are on the verge of pleading guilty and are co-operating with the government's investigation.

Prosecutirs claimed that Betty Vinson and Troy Normand, former WorldCom accounting office employees under Yates' direct supervision, helped orchestrate the inflation of WorldCom's reported earnings, as did former controller David Myers. Myers was arraigned in August and freed on a $2m (£1.3m) bail.

Uncharged as yet is former WorldCom chief executive officer Bernie Ebbers, who left the company in late April. But that could soon change, as the US Department of Justice (DoJ) continues its investigation and the discovery phase of its proceedings.

The next scheduled court date for Sullivan and Yates is a motions hearing on 9 December.

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