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WorldCom top-gun bites bullet

New York, Sept. 27 (Reuters): WorldCom Inc.’s former controller pleaded guilty on Thursday to taking part in one of the largest corporate accounting scandals in US history, saying he followed orders from senior management to falsify the telecommunication giant’s books.

David Myers, 44, of Madison, Mississippi, pleaded guilty before US District Judge Richard Casey in Manhattan federal court to false filing of documents with securities regulators, conspiracy to commit fraud and securities fraud.

“I was instructed on a quarterly basis by senior management to ensure that entries were made to falsify WorldCom’s books to reduce the company’s reported actual costs therefore increasing reported earnings,” Myers told the judge.

He said he worked with others under his supervision at the direction of senior management to make accounting adjustments “for which I knew there was no justification or documentation.”

After the plea hearing, Myers’ lawyer told reporters his client is co-operating with authorities but would not comment on whether Myers would testify against others. Myers’ co-operation could help prosecutors build a case against indicted former chief financial officer Scott Sullivan, his immediate higher-up in the company, and even against former chief executive Bernard Ebbers.

Casey accepted Myers’ guilty plea and set a tentative sentencing date of December 26. The two fraud charges each carry a possible maximum sentence of five years, while the false filing charge carries 10 years. However, the federal sentencing guidelines, which have not yet been determined by the judge, will most likely result in a sentence far lower than the maximum.

Other charges

As Myers pleaded guilty, the Securities and Exchange Commission filed a related civil suit against the former executive in Manhattan federal court. His lawyer N. Richard Janis said he expects to resolve that suit soon.

Janis told reporters his client has also reached an agreement with Mississippi Attorney General Mike Moore to plead guilty to one count of violating that state’s laws. He said the plea could take place as early as next week but did not expect it to result in additional sanctions.

“David Myers was a reluctant participant in the events that have led us here today,” Janis said. “Although he acted at the direction of others and although he expressed his discomfort and displeasure with the actions being undertaken by WorldCom, he recognises that as a corporate officer those facts do not relieve him of his own responsibility.”

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