Worldcom Sentencing Continues

Saying he failed his family, investors and God, the former accounting director of WorldCom was sentenced Tuesday to a year and a day in prison for his role in the record $11 billion fraud.

Buford "Buddy" Yates, 49, could have received a much stiffer term but was given a break for cooperating with prosecutors in their case against ex-CEO Bernard Ebbers, who was sentenced to 25 years in prison.

Acting on instructions from higher executives, Yates told lower-level accountants at WorldCom to make adjustments to company financial records as the fraud snowballed from 2000 to 2002.

"I failed my family and loved ones, the employees and investors at WorldCom, myself, but most importantly my God," Yates said. "There are no words to describe my shame and humiliation."

He was fined $5,000 and ordered to report to prison Oct. 10. The extra day in the sentence makes Yates eligible to have his prison term reduced, although only by a matter of weeks, for good behavior.

Yates is one of five former WorldCom executives and accountants who pleaded guilty to fraud and helped the government build its case against Ebbers.

U.S. District Judge Barbara Jones called him "perhaps the least useful" of the five and noted he initially denied any knowledge of the scheme to record operating expenses as long-term capital expenditures.

Still, the judge said, "He did not instigate this scheme. He did not think it up." She said Yates appeared to have been motivated by "reluctance to upset the apple cart" at the company.

Yates' lawyer, David Schertler, suggested to the judge that Yates and his subordinates lacked the sophistication to deal with major accounting decisions at a Fortune 500 company.

"They were small-town, Jackson, Mississippi, folks," he said. "I don't think they were equipped to deal with the situation in which they found themselves."

After court, Schertler told reporters the sentence was just and that Yates was "happy to have this behind him."

Yates' boss at WorldCom, former controller David Myers, and former chief financial officer Scott Sullivan are almost certain to get lengthier prison terms when they are sentenced later this week.

The judge said Yates' role in the fraud was closer to that of the lower-level accountants than to that of Myers and Sullivan.

The $11 billion fraud capsized WorldCom when it came to light in 2002. The bankruptcy, like the fraud, was the largest in U.S. history. The company has emerged under the name MCI.

Ebbers must report to prison two days after Yates unless Jones allows him to remain free while he appeals his conviction. He was also ordered to turn over nearly all his assets, totaling up to $40 million, to settle a shareholder lawsuit.

Sullivan, who will be sentenced Thursday, reached a similar settlement under which he must sell the $11 million mansion he is building in Boca Raton, Fla., and turn over what's left of his retirement account.

Two accountants who worked under Yates were sentenced last week, one getting five months in prison and the other probation.
By Erin McClam