Ebbers to begin 25-year sentence

Former WorldCom CEO to report to federal prison following conviction for his role in $11 billion fraud.

September 26 2006

NEW YORK (CNNMoney.com) -- Ex-WorldCom CEO Bernard Ebbers will report to a federal prison Tuesday to begin his 25-year sentence for his role in an $11 billion accounting fraud.

Ebbers, who was convicted by a jury in March 2005 of nine counts of conspiracy, securities fraud and other crimes that led to the phone company's July 2002 bankruptcy, is due to report to the federal prison in Yazoo City, Miss.

Ebbers, whose conviction was part of a wave of corporate scandals at Enron and Adelphia, was free on bail while appealing his conviction and sentence, but in July a three-judge panel of the U.S. Second Circuit Court of Appeals affirmed both.

At a sentencing hearing last year, Federal Judge Barbara Jones recommended Ebbers be sent to the low-security facility in Yazoo City.

Low-security prisons, designed for nonviolent offenders, often resemble school dormitories and typically do not have barbed wire or guard towers.

The Yazoo City facility, located 36 miles north of Jackson, Miss., houses both low- and medium-security prisoners and offers a number of intramural sports leagues, bocce and yoga classes, according to the 2005-2006 edition of the Federal Prison Guidebook.

While the judge recommended Yazoo City, there were news reports Monday that Ebbers may be sent to a federal prison in Oakdale, La. Ebbers is not yet in federal custody, according to the Bureau of Prisons Web site.

Ebbers' sentence was five times as long as that given to ex-WorldCom financial chief Scott Sullivan, who pleaded guilty to fraud charges and was the government's star witness at Ebbers' trial.

Under federal rules, Ebbers would be required to serve about 85 percent of his sentence - meaning that he would not be released until 2028 at the earliest.

Prosecutors had asked for a harsh sentence - a prison term of up to 85 years - based on billions of dollars in investor losses at WorldCom.

Ebbers transformed WorldCom into a telecommunications powerhouse through a string of takeovers. He was known as a grandfatherly CEO who preferred cowboy boots to suits, but he also has been described as an exacting, cost-obsessed boss.

WorldCom emerged from bankruptcy as MCI Inc., which was later acquired by Verizon Communications Inc.(Charts). Ebbers agreed last year to forfeit almost all of his personal wealth in a settlement with WorldCom investors.

http://money.cnn.com/2006/09/26/news/newsmakers/ebbers/index.htm