New Charges For WorldCom's Ex-CFO

Scott Sullivan arrest
The government filed new bank fraud charges Wednesday against former WorldCom chief financial officer Scott Sullivan, accusing him of lying on financial statements to secure $4.25 billion in credit for the company.

Sullivan was already charged with ordering WorldCom accountants to move operating expenses off the books, making the company appear profitable when it was losing money. He has pleaded innocent to the charges.

Sullivan was CFO at Mississippi-based WorldCom when investigators say the company carried out a $9 billion accounting fraud, the largest in U.S. history.

A new indictment unsealed in federal court in Manhattan adds charges of bank fraud and making false statements to the counts Sullivan already faced.

The new charges add 120 years to his potential sentence, prosecutors said, although the sentence would likely be much less under federal sentencing guidelines if Sullivan were convicted.

The new charges accuse Sullivan of using false financial statements to obtain loans in 2001 from Bank of America, Chase Manhattan Bank, Citibank and other lending institutions.

Sullivan, 40, who lives in Boca Raton, Fla., is free on $10 million bail on the original charges. He had argued to have his trial moved on grounds a New York trial would be an unfair financial burden, but a judge denied his request.

His trial is scheduled to begin Sept. 8.

Court papers said Sullivan was the highest paid CFO in the United States in 1997, receiving $19 million in salary, bonuses and other compensation.

Besides his salary, he also made more than $45.3 million by selling WorldCom stock between 1995 and 2000, according to the court papers.

By Erin McClam