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In closing arguments Wednesday, prosecutors labeled former WorldCom CEO Bernard Ebbers as the leader of a massive accounting fraud orchestrated to save his personal fortune. “Money, power and pressure corrupted Ebbers,” William Johnson, an Assistant U.S. Attorney from the Southern District of New York, said in summarizing the complicated case against Ebbers. Johnson, whose voice remained at a steady volume throughout, offered a systematic portrayal of the $11 billion accounting fraud. He also brushed aside the defense claim that Ebbers was ignorant of the fraud despite his position as its leader. In a low-key, methodical delivery lasting more than three hours, the prosecutor outlined the steps Ebbers and his foot-soldiers took at WorldCom to understate expenses and inflate revenues to meet lofty Wall Street expectations. The government charged Ebbers with nine counts of securities fraud and related crimes. If found guilty, he could face decades in jail. When WorldCom’s business sagged in 2000 in the face of the doomed Internet market and slowing economy, Ebbers was at a “crossroads,” said Johnson in referring to a phrase spoken by his colleague David Anders during opening statements. It is at this point, according to the government, that Ebbers began to order WorldCom’s former CFO Scott Sullivan and the accounting department to come up with ways to meet analysts’ expectations, which the company could not meet other than through illegal accounting practices. The fraud continued through 2002 when an internal audit uncovered the wrongdoing, leading to WorldCom’s precipitous decline into bankruptcy that cost shareholders and creditors tens of billions of dollars, the prosecutor said. Johnson covered events from 2000 through 2002, documenting every fiscal quarter in which the government accused Ebbers of wrongdoing. “What we heard in this trial,” he said, “is that Ebbers and Sullivan cooked the books quarter after quarter.” Throughout the summary, Johnson injected the major themes of the government’s case. Ebbers had provided lofty guidance to analysts and investors of WorldCom’s performance despite the bleak reality, said Johnson. When the company could not meet these expectations, Ebbers ordered his subordinates to come up with ways, illegal or not, to “hit the numbers,” a phrase repeated throughout the trial to signify Ebbers’ alleged commands to commit fraud. The motive arose from Ebbers’ loans totalling hundreds of millions of dollars, Johnson said. The loans, threatened by margin calls as WorldCom’s stock price fell, as well as Ebbers’ personal fortune, were linked to WorldCom’s success, inducing the defendant to commit fraud, according to the government. Johnson also dismissed Ebbers’ claims of ignorance of the fraud, a major defense strategy put forth by lead defense attorney Reid Weingarten of Steptoe & Johnson, who has argued that Ebbers left accounting and finance tasks largely to Sullivan and other subordinates. Presenting a host of documents, replaying a message left on Ebbers’ voicemail by Sullivan, and referring to testimony, Johnson tried to convince jurors that Ebbers was a detail-oriented boss who was well aware of the company’s finances. The government’s closing at times suffered from the prosecutorial obligation to provide an A-to-Z summary of events, which washed away some of the salient facts within the step-by-step chronology. Johnson’s argument grew stronger, however, when he finished the chronology and turned to the vital points of the trial, bringing alive the critical facts for jurors by listing 10 items he argued were “devastating proof of Ebbers’ guilt.” Many of those facts came from Sullivan, the government’s chief witness, who in nearly all instances was the only person to have allegedly discussed the fraud with Ebbers. Sullivan, and several other witnesses, pleaded guilty to various crimes and agreed to cooperate with the government. Weingarten tried to exploit this cooperation in his cross-examination of Sullivan, by casting the witness as a liar out to save himself by turning in an innocent man. In his closing, Johnson tried to defuse this strategy. “There is every reason to believe Scott Sullivan in this case,” he said, pointing to the details the witness provided and a host of corroborating documents to support the testimony. “Common sense tells you that Scott Sullivan did not act alone,” Johnson said in attacking the defense’s claim. “Mr. Sullivan orchestrated the fraud without the consent and knowledge of his former boss.” From this defensive posture, Johnson went on the attack, telling the jury that “you were lied to” during Ebbers’ testimony. He pointed to Ebbers’ tension-filled cross-examination conducted by Anders to showcase his point. “Ebbers was a different person on cross-examination,” Johnson said, contrasting the testimony with the smooth delivery during direct examination. “Instead he hedged … dodged … and fought every point,” said Johnson. The defense is scheduled to finish closing arguments today. WorldCom emerged from the nation’s largest ever bankruptcy last April under the name, MCI, which is in separate merger talks with Verizon and Qwest.

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