WorldCom Execs Plead Not Guilty

WorldCom Inc. executives suspected of crafting one of the largest corporate accounting scandals in U.S. history pleaded not guilty to several felony charges Wednesday.

Meanwhile a federal prosecutor said Wednesday he planned to file a superseding indictment, add new charges to the case and possibly add new defendants in a scandal that has forced one of the world’s largest companies to file for bankruptcy protection.

“The government is continuing its investigation and we do plan to supersede at some point, to add charges to the same scheme and to potentially add defendants,” The Associated Press quoted Assistant U.S. Attorney David Anders, who addressed U.S. District Court Judge Barbara Jones.

Scott Sullivan, 40, WorldCom’s former chief financial officer, and Buford Yates, 46, former director of general accounting, entered not guilty pleas during their arraignment in Manhattan federal court. Both men were charged in an indictment last week of one count of conspiracy to commit securities fraud, one count of securities fraud and five counts of making false filings with the Securities and Exchange Commission.

Sullivan and former controller David F. Myers were arrested Aug. 1 on the securities fraud and conspiracy charges. The indictment filed last week also alleged that two other WorldCom executives participated in the accounting scheme: Betty L. Vinson, director of management reporting, and Troy M. Normand, director of legal entity accounting.

WorldCom revealed this summer it had inaccurately posted $3.85 billion in earnings over five quarters by booking expenses as capital expenditures, an accounting method that allowed the telecom titan to elude losses. In August the company said it had improperly recorded an additional $3.3 billion in earnings stretching back to 1999, marking a $7.2 billion scandal.

Authorities have not filed any charges against Bernie Ebbers, WorldCom’s former CEO, who transformed the company from a modest operation based in Mississippi to the world’s largest Internet backbone company and No. 2 U.S. long distance carrier.

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