Friday, September 8, 2006

Ebbers Set to Start His 25-Year Prison Term

In what will likely be the final chapter in the prosecution of former WorldCom CEO Bernie Ebbers, assuming the Supreme Court does not grant certiorari to review the conviction, U.S. District Judge Barbara Jones ordered him to report to the Bureau of Prisons on September 26 to begin serving his 25-year prison term.  The Second Circuit affirmed the conviction and sentence in July, and so the next step will be determining where Ebbers will be incarcerated.  Judge Jones recommended that Ebbers be sent to the federal correctional institution (FCI) at Yazoo City, Mississippi, which has both low- and medium-security facilities in the complex.  A Jackson Clarion-Ledger article (here) notes that former WorldCom controller David Myers served his term at the same facility.  The company's former CFO, Scott Sullivan, a star witness at the Ebbers trial, is serving his five-year sentence at the FCI in Jesup, Georgia, and according to the Bureau of Prison's website (here) is scheduled for release in March 2010.

With Ebbers apparently headed to prison, one of the only remaining issues in the case is completing the sale of his assets to satisfy the forfeiture to which he agreed to settle claims by prosecutors, the SEC, and the plaintiffs in the securities fraud class action against the company and its officers.  The Clarion-Ledger article notes that the assets "include the Brookhaven Country Club, an 18-hole golf course, clubhouse, swimming pool and tennis courts; the 28,000-acre Angelina Plantation that is a commercial farming operation about 30 miles west of Natchez and located in Louisiana; and majority interest in KLLM Transport Services Inc., one of the largest temperature-controlled, over-the-road truckload carriers in the United States."  The Angelina Plantation is scheduled to be auctioned shortly and there is an offer of $31 million.  The president of the company overseeing the auction noted that "[w]e have nothing but gratitude for the gracious way that Bernie has dealt with us." (ph)

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