WorldCom Exec Cops Plea

A former WorldCom executive pleaded guilty Monday to securities fraud and conspiracy and agreed to cooperate with investigators against his bosses in one of the biggest cases of crooked corporate accounting in U.S. history.

Buford Yates said in federal court that he was instructed by supervisors to misreport expenses.

Yates, 46, served as WorldCom's director of general accounting. Prosecutors say he carried out orders by chief financial officer Scott Sullivan to hide $3.8 billion in expenses in order to make the telecommunications giant appear profitable.

Yates told U.S. Magistrate Judge Andrew J. Peck he knew the wrong information would be reported to the Securities and Exchange Commission and relayed to the public. Peck said he would recommend that a federal judge accept the plea.

Sentencing was set for Jan. 9. Yates faces 10 years in prison on the conspiracy charge and a $1 million fine.

Yates, of Brandon, Miss. was the second executive at the company to plead guilty in the largest corporate accounting fraud in United States history.

David Myers, WorldCom's ex-controller, pleaded guilty in September to securities fraud, saying he was instructed by senior management to falsify ledgers.

Two other accounting executives who worked directly under Yates are expected to plead guilty as part of cooperation deals with authorities, according to court papers.

Prosecutors say the executives, Betty Vinson and Troy Normand, carried out orders from Sullivan and Myers to hide the $3.8 billion in operating expenses as capital expenses.

"Sullivan, Yates, and their co-conspirators were able to assure that WorldCom's reported earnings exceeded its actual earnings for the period from October 2000 through April 2002 by approximately $5 billion," the indictment said.

"As Sullivan, Myers, Yates, Vinson, and Normand well knew, there was no justification in fact or under generally accepted accounting principles for these entries," it said.

Since the accounting mess first came to light, WorldCom officials have said roughly $7 billion was misreported, and reports have pinned the final figure as high as $9 billion.

Sullivan, who is free on $10 million bond, has maintained his innocence. He is under increasing pressure to cooperate after the actions taken by Yates and Myers, and the expected pleas by Vinson and Normand.

Sullivan's lawyer, Irv Nathan, has said his client is a victim of a "rush to judgment."

Prosecutors are trying to determine what former CEO Bernard Ebbers knew about the illegal accounting tricks.

Ebbers has not been charged with a crime and has denied any knowledge of the misdeeds.