NEW YORK (AP) – A federal appeals court on Friday upheld the conviction and 25-year prison sentence of former WorldCom chief executive Bernard Ebbers on charges related to a multibillion dollar accounting fraud.

The ruling by the three-judge panel of the 2nd U.S. Circuit Court of Appeals could clear the way for Ebbers to begin serving time for his actions as head of the telecommunications company.

Convicted in 2005, Ebbers had argued on appeal that he had been denied a fair trial and that his lengthy prison sentence was unreasonable.

Writing for the court, Judge Ralph K. Winter acknowledged that 25 years is a long sentence for a white collar crime, “longer than the sentences routinely imposed by many states for violent crimes, including murder.”

But he added that Ebbers’ actions to hide WorldCom’s financial problems were substantial, and had cost investors dearly.

“The securities fraud here was not puffery or cheerleading or even a misguided effort to protect the company, its employees, and its shareholders from the capital-impairing effects of what was believed to be a temporary downturn in business,” Winter wrote. “The methods used were specifically intended to create a false picture of profitability even for professional analysts that, in Ebbers’ case, was motivated by his personal financial circumstances.”

When the extent of the $11 billion accounting fraud was revealed, WorldCom collapsed and declared bankruptcy, wiping out investors.

Ebbers’ attorney, Reid H. Weingarten, did not immediately return a phone message Friday.

A spokeswoman for the U.S. attorney in Manhattan declined to comment on the ruling.

Prosecutors had argued at Ebbers’ trial that had played a lead role in orchestrating a scheme to hide the company’s declining performance and prop up its stock price.

The scandal was billed as one of the largest accounting frauds in history.

In his appeal, Ebbers contended that the trial judge had unfairly allowed the U.S. attorney to introduce testimony from witnesses who had been given immunity from prosecution, while denying the same immunity to potential defense witnesses.

The court ruled that the three people Ebbers had wanted to call to his defense probably wouldn’t have been able to help him.

Ebbers also had argued that his sentence should have been closer to the punishments given to other WorldCom executives and accountants. The company’s chief financial officer, Scott Sullivan, got five years. Controller David Myers and accounting director Buford Yates each got one year. Director of Management Reporting Betty Vinson got five months.

The court noted that all of those defendants had pleaded guilty and cooperated with prosecutors, while Ebbers chose to go to trial.

“Moreover,” Winter wrote, “each was a subordinate of Ebbers. Ebbers, as CEO, had primary responsibility for the fraud.”

The trouble at WorldCom began in 2000, at a time when it was flying high with 90,000 employees and reported revenues of $39 billion.

As the company’s performance began to tumble amid the dot-com bubble burst, Ebbers, who had helped build the company, found himself in a quandary. Using WorldCom stock as collateral, he had borrowed $400 million from banks to finance other ventures, including a ranch, timberlands and a yacht-building company.

Prosecutors contended that Ebbers had subordinates cook the company’s books to keep its stock value from plunging.

AP-ES-07-28-06 1548EDT


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