Watch CBSN Live

Ebbers Sentenced To 25 Years

Bernard Ebbers, who as CEO of WorldCom oversaw the largest corporate fraud in U.S. history, was sentenced Wednesday to 25 years in prison.

Judge Barbara Jones of U.S. District Court in Manhattan handed out the sentence three years after WorldCom collapsed in an $11 billion accounting fraud, wiping out billions of investor dollars.

"I find that a sentence of anything less would not reflect the seriousness of this crime," Jones said. Jones ordered the 63-year-old Ebbers to report to prison on Oct. 12. She said she would recommend Ebbers to the federal prison in Yazoo City, Miss., close to his home.

Ebbers did not address the judge and showed no discernible reaction. His wife, Kristie Ebbers, cried quietly.

Jones said Ebbers deserved a stiff sentence because he was a leader of the epic accounting fraud that toppled the telecom giant.

"Mr. Ebbers was the instigator of the fraud," said U.S. District Judge Barbara Jones as she prepared to pronounce his sentence.

Jones said she believed federal guidelines called for a sentence of between 30 years and life in prison.

Jones spoke shortly after a former employee told the court how his life was destroyed by Ebbers' greed.

Henry J. Bruen Jr., 37, a former salesman, said at Ebbers' sentencing hearing that the company's collapse three years ago caused him "untold human carnage" and put him through "sheer hell." He lost all of his savings and couldn't get another sales job. Legal Analyst Andrew Cohen reports Ebbers' sentence is unlikely to be reversed. "This is in the middle-to-high range of sentencing options and the judge was within her discretion to hand down such a tough sentence given the enormity of the financial crimes here," Cohen said.

"Ebbers' only chance now to get out of prison soon is to convince the appellate courts that his trial judge made a fundamental mistake during the course of his trial," Cohen said. "That rarely occurs, and it's not at all clear that it occurred here, although the defense has a few decent issues it can raise before a federal appeals panel."

Defense lawyer Reid Weingarten had asked for leniency, mentioning Ebbers' heart condition and his charitable works, cited repeatedly in 169 letters sent to the judge. He described Ebbers as "a modest man" and an angel to many desperate charitable causes.

The judge said she did not believe his heart condition was serious enough to warrant a lesser sentence. She called the charity question a close call and said she would consider it but not formally reduce sentence because of it.

Ebbers is the first of six former WorldCom executives and accountants facing sentencing this summer. The other five all pleaded guilty and agreed to cooperate against their former boss. WorldCom emerged from bankruptcy as MCI Inc.

Defense lawyer Brian Heberlig told the court Wednesday that Ebbers should not be punished more severely because of money lost by shareholders. He noted that economic factors led WorldCom stock to plummet from $35 a share to less than $1 before the fraud was revealed in June 2003.

Assistant U.S. Attorney David Anders said the government acted conservatively in estimating loss. Jones said she agreed with the government's estimate that the fraud cost investors about $2 billion after it was disclosed.

In papers filed last month, prosecutors asked Jones to follow a probation report that suggested Ebbers receive a life sentence after calculating his crimes under federal sentencing guidelines.

The prosecutors also noted that Adelphia Communications Corp. founder John Rigas, 80 and in poor health, received a 15-year sentence last month, amounting to a life term, for his role in the fraud at that company.

"The enormity of the crimes that Ebbers committed cannot be overstated: The fraud at WorldCom was the largest securities fraud in history," prosecutors wrote, noting the name WorldCom is now "synonymous with fraud."

The sentencing was coming a day after the judge denied a bid by Ebbers for a new trial, a ruling in which she cited "strong" evidence supporting the conviction, including government witnesses who "outlined the fraud in painstaking detail."

Ebbers had argued the judge or prosecutors should have granted immunity to three witnesses that Ebbers contends could have helped clear him of charges related to the fraud.

His lawyers also said prosecutors prejudiced jurors, suggesting in their closing statement that there was evidence outside the trial record that proved government witnesses were telling the truth.

The sentencing was also part of a damaging week for Ebbers. On Monday, another judge gave her blessing to a settlement under which Ebbers must forfeit almost all his personal assets, including $5 million cash up front, to resolve a shareholder lawsuit.

That settlement will leave Ebbers' wife with about $50,000 of Ebbers' assets and a modest home in Jackson, Miss. A far more lavish family home in Brookhaven, Miss., will be sold off as part of the settlement.

Ebbers resigned as CEO in 2002, shortly before the widespread fraud at the company came to light. Investigators eventually uncovered $11 billion in improper accounting.

That summer, WorldCom collapsed in the largest bankruptcy in U.S. history, wiping out billions of dollars of investors' money. It has since re-emerged under the name MCI Inc., based in Ashburn, Va.

At trial, Ebbers argued he was completely unaware of the fraud, and that he simply did not look at some key WorldCom financial documents that showed glaring accounting irregularities.

Five other WorldCom executives and accountants, all of whom pleaded guilty in the fraud and cooperated against Ebbers, face sentencing later this summer.

The stiffest sentence could go to Scott Sullivan, the former finance chief under Ebbers, who said he carried out the fraud in 2000, 2001 and 2002 on Ebbers' orders.

WorldCom remains the largest of the corporate frauds that began making headlines with the fall of Enron Corp. in late 2001. Three top executives from that company are due to go on trial in Houston in January.

View CBS News In