Ebbers sentenced to 25 years in prison

updated 8:21 p.m. ET July 13, 2005

NEW YORK - Weeping in court as he learned his fate, former WorldCom boss Bernard Ebbers was sentenced to 25 years in prison Wednesday for leading the largest corporate fraud in U.S. history.

It was the toughest sentence imposed on an executive since the fall of Enron in 2001 touched off a record-breaking wave of business scandals.

Even with possible time off for good behavior, Ebbers, 63 and with what his lawyers describe as serious heart problems, would remain locked up until 2027, when he would be 85.

The sentence came four months after Ebbers was convicted of overseeing the $11 billion WorldCom fraud — much of it a pattern of chalking up expenses as long-term capital expenditures, which are classified as assets.

CNBC and other news organizations originally reported the sentence as between 30 years and life in prison. However, Ebbers’ attorneys were allowed to speak before the final sentence was handed down and the judge ultimately decided to render a final, 25-year verdict.

Ebbers, an imposingly tall man with buzzed white hair, leaned forward in his chair and cried, sniffling audibly, after Judge Barbara Jones of U.S. District Court in Manhattan read his penalty.

“I find that a sentence of anything less would not reflect the seriousness of this crime,” the judge said.

As a packed courtroom emptied after the hearing, Ebbers’ wife, Kristie, who had cried quietly during the hearing, walked up to the defense table and embraced her husband tightly. Ebbers did not speak to reporters.

FREE VIDEO Ebbers to appeal July 13: Bernard Ebbers’ attorney Reid Weingarten says his client will appeal his 25-year prison sentence “as vigorously as possible.” CNBC

It was just more than three years ago that the fraud at WorldCom began to come to light, reducing shares of stock once worth more than $60 to mere pennies. Billions of dollars in market value vanished.

Mississippi-based WorldCom filed for bankruptcy — also the largest in U.S. history — in the summer of 2002. It has since re-emerged under the name MCI Inc., with headquarters in Ashburn, Va.

Gino Cavallo, an MCI service consultant who also worked for years at WorldCom, lost tens of thousands of dollars in retirement money in the fraud. He attended the sentencing and said he was pleased.

“The man’s 63,” Cavallo told reporters. “He’s going to die in jail. How much sterner could you get?”

The sentence completed a staggering fall for Ebbers, whose homespun Mississippi manner and hard-charging business style earned him status as an admired chief executive — and the nickname Telecom Cowboy.

The former basketball coach helped start a small long distance reselling business in the early 1980s, then gradually built it into a business titan by swallowing ever-larger companies, eventually even MCI.

Jones ordered Ebbers to report to prison Oct. 12, and said she would recommend that federal prisons officials assign him to Yazoo City, Miss., so his family could see him easily.

But the judge said she would take written arguments over the next six weeks on whether she should allow Ebbers to remain out of prison while he appeals his conviction, a process likely to take at least a year.

She imposed the 25-year sentence after a two-hour hearing in which defense lawyers and federal prosecutors debated exactly how much money was lost because of the fraud, a key factor in determining the penalty.

The defense had argued it was impossible to find whether investors had sold WorldCom stock in 2002 directly because of the fraud, company personnel changes or the generally poor economy. The judge was unmoved.

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