Gloves off in Ebbers WorldCom fraud trial

Defence and prosecution exchange blows

By Tim Richardson, 26th January 2005

The fraud trial of ex-WorldCom chief exec Bernie Ebbers kicked off yesterday with the man at the centre of the case accused of telling "lie after lie after lie".

The opening of the most eagerly awaited fraud trial in years saw Ebbers portrayed as the driving force behind the $11bn (£5.8bn) collapse of telco WorldCom in 2002.

Aware that WorldCom would not meet the ambitious forecasts Wall Street was expecting, Ebbers told his people as early as 2000 to fiddle the figures, said prosecutors. David Anders, the US attorney leading the prosecution's case, said that Ebbers knew the "books were cooked", because "he told people to do it", reports The New York Times.

And the fact that Ebbers himself owned millions of WorldCom shares - which were used as security against personal loans - meant his motive was driven by financial preservation.

In his opening address, defence lawyer Reid Weingarten told the Manhattan court that Ebbers just wasn't capable of masterminding such a complex financial fraud. Ebbers was portrayed as a victim in this corporate collapse, an entrepreneur from a modest background who left accounting issues to his CFO Scott Sullivan.

Sullivan, who last year he admitted "engaging in a fraudulent scheme to conceal WorldCom's poor financial performance", is the Government's star witness against Ebbers. Weingarten tore into Sullivan, accusing him of masterminding the fraud and calling him "not only a liar, [but] a poseur".

Rounding on the credibility of Sullivan and of the Government's case, the defence added: "There are zillions of documents in this case and there ain't one smoking gun."

The trial is expected to last eight weeks. If found guilty, Ebbers faces 25 years in jail. ®