2 More WorldCom Execs Plead Guilty

Participants of the "Ironman Frankfurt" triathlon cross a bridge in Frankfurt during the cycling portion of the event in Frankfurt, Hessen state, central Germany, on Sunday, July 5, 2009. AP Photo/Daniel Roland

Two more WorldCom executives pleaded guilty Thursday to charges stemming from a federal probe of the company's multibillion-dollar accounting scandal, bringing to four the number of officials at the Mississippi-based telecom who have admitted to wrongdoing.

Betty Vinson, the former director of management reporting, entered her plea to charges of conspiracy to commit securities fraud and securities fraud in U.S. District Court in Manhattan before Magistrate Judge Andrew J. Peck.

Later in the day, Troy Normand, the director of legal entity accounting, pleaded guilty to conspiracy and securities fraud before Judge Gerard Lynch for his part in the same scheme.

Normand, 35, and Vinson, 47, were top executives in the company's general accounting department, overseeing financial record-keeping.

Both were also sued by the Securities and Exchange Commission on Thursday for their roles in the company's $7.2 billion accounting debacle.

Prosecutors filed court papers in August indicating the pair would plead guilty as part of cooperation agreements.

During her plea, Vinson told the judge she was ordered by her bosses in October 2000 to misstate $800 million on WorldCom's ledgers.

"I was very concerned about the order to make the adjustment," Vinson told the judge.

Over the next 18 months, she carried out similar orders to transfer huge sums in expenses in a scheme to hide WorldCom's financial woes from the investing public, she said.

Outside court, her lawyer Joseph Hollomon said Vinson had protested those changes but was overruled.

He said his client rarely had contact with former chief executive Bernard Ebbers, but he wouldn't say if she could provide evidence against him. Ebbers has not been charged with any crime, and he has denied any wrongdoing.

Vinson faces up to 10 years in prison on the most serious charge, securities fraud, but may get substantially less for providing testimony in the case. Her admissions come three days after her immediate supervisor, Buford Yates Jr., pleaded guilty for his role in the scheme as part of a deal to cooperate with prosecutors.

Yates' boss, Myers, has also pleaded guilty.

In their pleas in Manhattan federal court, Myers and Yates said the orders to falsify WorldCom's ledgers came from the top levels of corporate management.

Myers, Yates, Vinson and Normand are expected to provide evidence against Sullivan, the former chief financial officer, who has been indicted but has maintained his innocence in the case.

Prosecutors are also collecting evidence to determine what Ebbers knew about the fraud.

An indictment filed by the Manhattan U.S. Attorney's office estimates the scheme helped hide roughly $3.8 billion in expenses and overstate earnings by $5 billion.

WorldCom officials have said the total amount of financial misstatements is around $7 billion, and some reports have put the figure at $9 billion.

Prosecutors say Vinson and Normand carried out orders from Sullivan and Myers to disguise the $3.8 billion in operating expenses as capital expenses.

Sullivan is free on $10 million bond. His lawyer, Irv Nathan, has said his client is a victim of a "rush to judgment."
  • Joel Arak

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