Former WorldCom head sentenced to 25 years

NEW YORK - Bernard Ebbers, the entrepreneur who built WorldCom Inc. into a telecommunications giant, has been sentenced to 25 years in prison for his role in the business fraud that led to the largest US corporate bankruptcy.

The sentence means Ebbers, 63, could spend the rest of his life in prison.

In imposing the lengthy prison term, Judge Barbara Jones of US District Court in Manhattan rejected defence attorneys' arguments that the government overstated the losses that investors suffered in the fraud, as well as contentions that the former WorldCom chief executive was not a mastermind of the wrongdoing.

Ebbers "was clearly a leader of criminal activity in this case", the judge said.

The one-time milkman and high school sports coach sat silently when the sentence was announced and did not make any statements at the hearing.

Afterwards, he stood up and hugged his wife, both teary-eyed. He then stood by himself with his head bowed and hands grasping the back of his chair for more than a minute.

While the judge calculated that discretionary sentencing guidelines called for a prison term of 30 years to life, she modified Ebbers' sentence to 25 years, citing factors such as his good works in the community.

Robert Mintz, a former federal prosecutor who now is a partner at law firm McCarter & English said: "It's hard to find a white-collar case that really compares with the sentence we've seen here".

The punishment sent "a chilling message that people who engage in this type of large-scale fraud are likely to find themselves facing sentences that in the past had been reserved for perpetrators of violent crimes", he said.

Ebbers was convicted in March on nine counts of conspiracy, securities fraud and filing false statements with regulators stemming from the $11 billion accounting scandal at WorldCom.

Separately on Wednesday, the US Securities and Exchange Commission said Ebbers had agreed to settle civil charges related to hundreds of millions of dollars in fraudulent adjustments and entries to the company's books.

The judge ordered Ebbers to surrender by October 12, recommending that he serve his time in a low-security federal prison in Yazoo City, Mississippi. His lawyers asked that he be allowed to stay out of prison on bail while he pursues an appeal, something the government opposes.

Jones gave both sides several weeks to submit papers on that issue. Earlier this week, the judge rejected a bid by Ebbers for a new trial.

Under federal rules, Ebbers would be required to serve about 85 per cent of his sentence -- meaning that he would not be released until 2027 at the earliest if he starts the jail time later this year.

Ebbers transformed WorldCom into a telecom powerhouse through a string of takeovers. He was known as a grandfatherly CEO who preferred cowboy boots to suits, but he also has been described as an exacting, cost-obsessed boss who replaced the company's bottled water machines with tap water, saying employees wouldn't know the difference.

Five other former WorldCom executives, including ex-finance chief Scott Sullivan -- the chief prosecution witness in Ebbers' trial -- are also expected to face sentencing this summer. All five have pleaded guilty to fraud.

WorldCom filed for bankruptcy protection in July 2002 and is now known as MCI Inc.

- REUTERS