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Bernard Ebbers, the former CEO of WorldCom, was sentenced to 25 years in prison Wednesday for masterminding an $11 billion accounting fraud that devastated the finances of tens of thousands of investors, creditors and employees. The sentence, handed down by Southern District of New York Judge Barbara Jones, echoed loudly in an otherwise silent courtroom. The tearful 63-year-old defendant was visibly shaken, responding with difficulty to the judge’s questions. His wife Kristie, sitting a few feet behind him, also began to weep. The judge noted that under the federal sentencing guidelines, the proper range for a prison term, given Ebbers’ crimes, would have been between 30 years and life. The government had requested a life sentence for the nine counts of securities fraud and related charges Ebbers was convicted of in March. Judge Jones, though, told the packed courtroom that “30 years is excessive” under the circumstances. She said that Ebbers’ age, heart condition and philanthropic activities justified the 5-year reduction. However, Jones rejected most of the defense’s arguments calling for further leniency. Ebbers’ chief defense counsel, Reid Weingarten of Steptoe & Johnson, portrayed Ebbers as a loving husband and father, generous friend, and civic leader who had made more than $100 million in charitable donations. “[I]f you have an unblemished record, if you have endless numbers of people who attest to your goodness, doesn’t that count? I simply say doesn’t that count?” Weingarten said with a crack in his voice. “Doesn’t that count, particularly on this day?” To bolster this appeal, Ebbers’ defense sent 169 letters to the judge written by family members, friends, business colleagues and community leaders. “You cannot help but be moved by those letters,” Weingarten said. In one letter written to the judge, Ebbers’ wife, Kristie wrote, “I plea that you grant Bernie mercy in his sentencing.” Jones said that she had taken the letters into consideration but added, “I find a sentence of anything else would not reflect the seriousness of this crime.” The sentence that Ebbers received was 10 years more than the 15 years received last month by John Rigas, the founder of cable giant Adelphia in another high-profile case of corporate fraud. Rigas’ son Timothy received 20 years for his role in looting the company. The biggest area of contention between Ebbers’ lawyers and prosecutors, led by Assistant U.S. Attorney David Anders, dealt with the calculation of the losses caused by Ebbers’ fraud. Defense lawyers argued that the calculation was impossible to make considering all of the factors that go into a stock’s decline. Jones responded that she only needed a “reasonable estimate.” The government’s estimate was $2.25 billion in shareholder losses alone. ROLE IN FRAUD As he had in the past, Weingarten claimed that former WorldCom CFO, Scott Sullivan was the “mastermind … the brainchild” behind the accounting fraud. Ebbers, his lawyer argued to the judge, approved of the fraud but did not concoct the specific fraudulent measures used — that job fell to Sullivan and his accounting team. Jones agreed that Sullivan played a central role in the fraud but that role did not diminish Ebbers’ critical role, she ruled. Prosecutors contended that starting in September 2000, Ebbers directed Sullivan, the government’s chief witness, to manipulate WorldCom’s books to make it appear that the company continued to grow and profit in accordance with analyst and investor expectations. That manipulation, the government argued in the trial, led to WorldCom’s collapse into bankruptcy in June 2002 from which it emerged last April as MCI, a unit the telecommunications conglomerate WorldCom purchased in the late 1990s. Jones said she would make a recommendation to the Bureau of Prisons to assign Ebbers to a prison near his home in Mississippi. The judge decided not to fine or seek restitution from Ebbers in light of his civil settlement with class action claimants last week in which he agreed to give up most of his assets, largely leaving behind a home to be occupied by his wife. The Securities and Exchange Commission also settled civil charges with Ebbers Wednesday.

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