Worldcom Fraud

1356 Words6 Pages
Abstract

On March 15, 2005 former CEO of WorldCom, Bernard Ebbers sat in a federal courtroom waiting for the verdict. As the former CEO of WorldCom, Ebbers was accused of being personally responsible for the financial destruction of the communications giant. An internal investigation had uncovered $11 billion dollars in fraudulent accounting practices. Later a second report in 2003 found that during Ebber’s 2001 tenure as CEO, the company had over-reported earnings and understated expenses by an astonishing $74.5 billion dollars (Martin, 2005, para 3). This report included the mismanagement of funds, unethical lending practices among its top executives, and false bookkeeping which led to loss of tens of thousands of its employees.

On March 15, 2005 Bernard Ebbers sat in a federal courtroom waiting for the verdict. As the former CEO of WorldCom, Ebbers was accused of being personally responsible for the financial destruction of the communications giant. In July 2002, an internal investigation had uncovered $11 billion dollars in fraudulent accounting practices. A second report in 2003 found that during Ebber’s 2001 tenure as CEO, the company had over-reported earnings an understated expenses by an astonishing $74.5 billion dollars (Martin, 2005, para 3). This report included the mismanagement of funds, unethical lending practices among its top executives, and false bookkeeping which led to loss of tens of thousands of its employees. They also uncovered a series of clever manipulations intended to bury almost 4 billion in misallocated expenses and phony accounting entries (Moberg &, Romar, 2002, section 5, para 1). Hoping too sway the jury with an “ignorance is bliss” defense, he braced for the verdict. In hi...

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