Former WorldCom CEO freed from prison for health reasons

A former top executive sentenced to 25 years in prison in one of the largest corporate accounting scandals in U.S. history has been ordered freed early from prison for medical reasons.

Edmonton-born businessman was serving 25 year sentence for corporate accounting scandal

Former Worldcom CEO Bernard Ebbers exits Manhattan federal court in New York, Jan. 30, 2006. Ebbers, the former top executive was sentenced to 25 years in prison in one of the largest corporate accounting scandals in U.S. history. (Louis Lanzano/The Associated Press)

A former top executive sentenced to 25 years in prison in one of the largest corporate accounting scandals in U.S. history was ordered freed from prison Wednesday for medical reasons.

U.S. District Judge Valerie E. Caproni ordered the release of Canadian businessman and former WorldCom chief Bernard Ebbers after hearing lawyers discuss his medical condition. Ebbers, who was born in Edmonton, was not in court and his lawyers said he was hospitalized Wednesday.

Several family members for Ebbers who attended the proceeding rejoiced, sobbing and hugging one another, when the judge announced her ruling and said a written decision would be released at a later time.

Ebbers health situation 'dire'

Caproni said it fell within her discretion to order the early release after a lawyer cited severe medical problems for the 78-year-old Ebbers and said his weight had dropped from above 200 pounds to 147 pounds last week.

Attorney Graham Carner told the judge that Ebbers' health had gone into such steep decline that it was possible he might not live another 18 months. He said the man who was sentenced almost 15 years ago is essentially gone.

"The situation for Mr. Ebbers is dire," he said. "If he was released today, Mr. Ebbers is not going to be playing tennis or running a business."

He said prosecutors agreed that Ebbers had suffered deterioration in prison, including the loss of his vision and a troubling weight loss.

"I'm not as concerned about the vision as I am by the fact he seems to be wasting away," Caproni said. She noted that Ebbers is over 6 feet tall and was severely malnourished.

Assistant U.S. Attorney Jason Cowley told the judge that releasing Ebbers early would send "a terrible message to the rule of law" because it would cut his sentence in half.

Ebbers was convicted on all counts in his 2005 trial in which he was accused of orchestrating an accounting scandal which bankrupted a once giant telecommunication company. (Louis Lanzano/The Associated Press)

In court papers in September, his lawyers said Ebbers unintentionally bumped into another prisoner while walking in the facility in September of 2017, only to have the prisoner go to Ebbers' open cell later in the day and physically attack him.

The papers said the attack caused fractured bones around his eyes, blunt head trauma and other injuries. They also said Ebbers was put into solitary confinement because his "severely limited eyesight" made him unable to identify the attacker.

Collapse of WorldCom

WorldCom, which is based in Mississippi, collapsed and went into bankruptcy in 2002, causing losses to stockholders, including people who had invested through retirement plans.

The collapse followed revelations of an $11 billion US accounting fraud that included pressure by top executives on subordinates to inflate numbers to make the company seem more profitable.

WorldCom emerged from bankruptcy in 2004 and rebranded itself MCI, the name of a telecommunications company WorldCom bought years earlier. During bankruptcy, the company moved its headquarters from Clinton, Miss., to Ashburn, Va. In 2006, Verizon Communications bought MCI.

Ebbers was convicted in New York in 2005 on securities fraud and other charges and received a 25-year sentence. He has been imprisoned since September 2006. 

Five other WorldCom executives were convicted for their roles in the accounting fraud, including chief financial officer Scott Sullivan, who was a witness against Ebbers. Sullivan was sentenced to five years and served four with the remainder spent in home confinement.