Listen to this article
John Gotti and Manuel Noriega? Try again. The 25-year sentence imposed on Wednesday on Bernie Ebbers, WorldCom's former chief executive, for orchestrating an $11bn accounting fraud at the telecoms company is a portentous symbol for white-collar executives awaiting sentencing on similar charges.
Former federal prosecutors used words such as “sobering” and “staggering” to describe the length of time that Mr Ebbers, 63, will serve if he fails to win an appeal against the sentence.
John Coffee, a law professor at Columbia University, said the severity of the sentence was unusual since Mr Ebbers was not convicted of embezzling money or profiting directly from the fraud.
“If I were the sitting judge, I'm not sure I'd feel comfortable giving out this sentence for this crime. A sentence of more than 10 years used to be reserved for people who were exceptionally dangerous like mafia kingpins or Charles Manson.”
Mr Ebbers' sentence is the most severe served to a white-collar criminal in recent history. John Rigas, the 80-year old founder of Adelphia Communications was sentenced to 15 years in prison for looting the cable television company and lying to investors. Andrew Fastow, the former chief financial officer of Enron, considered the architect of the scheming at the bankrupt energy trader, was sentenced to 10 years after he agreed to co-operate with prosecutors.
“Mr Ebbers' sentence wasn't proportionate with what the others have gotten,” said Kirby Behre of the US law firm Paul Hastings.
Legal analysts say the chances of a successful appeal are slim. In court yesterday, Reid Weingarten, Mr Ebbers' chief counsel, bemoaned the fact that the trial was not heard in Mississippi, where WorldCom was based.
Just a few weeks ago, a jury in Birmingham, Alabama found Richard Scrushy, the former chief executive of HealthSouth, not guilty of co-ordinating a multi-billion dollar accounting fraud at the healthcare company he founded. Prosecutors had felt they had a cast-iron case.
“In the criminal justice system you have to recognise that you win some and lose some. HealthSouth is an example of a case where prosecutors lost despite tremendous evidence,” Mr Coffee said.
At the outset of Mr Ebbers' criminal trial earlier this year, prosecutors were faced with proving he was aware of an accounting scandal. Scott Sullivan, World'Com's former chief financial officer, said he and his lieutenants shifted tens of millions of dollars around the income statement in order to achieve earnings forecasts. While on the witness stand, Mr Ebbers denied knowing anything about the accounting details.
Five other former WorldCom executives are set to be sentenced this summer, including Mr Sullivan. All have pleaded guilty.