<$BlogRSDURL$> Mark in Mexico

Wednesday, July 13, 2005

Bernie Ebbers to Yazoo City 

The federal penitentiary in Yazoo City, Mississippi, that is. Wow! Bernard Ebbers, founder and former chief executive of the former Worldcom communications company, was sentenced in federal court in Manhattan to 25 years in prison. That is one of the harshest sentences ever handed down in a financial fraud case. The Worldcom financial fraud involved the loss of some $11 billion to investor and the company.

The judge, Barbara S. Jones, said that she had taken into consideration some 169 letters of support by various friends and acquaintances. She could have sentenced him to 30 years to life. Some of the letters argued, unfortunately, that the size of the losses exaggerated the severity of the fraud. I am not quite sure that I understand that logic. If the losses had totaled 11 dollars, Bernie wouldn't be going to jail at all.

Last month, in a settlement to avoid taking a beating in a civil case arising from the fraud, Ebbers was forced to give up nearly all his personal assets, including his home in Mississippi as well as several businesses, to satisfy the successful plaintiffs. The wheels of justice grind slowly but they grind exceedingly fine and can be relentless.
"He can never repay me or the tens of thousands like me whose lives disintegrated in the blink of an eye," said Henry K. Bruin, 37, a national sales employee from White Plains, N.Y. "Where do I get my life savings back from? Where is the attempt to make victims like me whole, not just class action litigants?"
Of the most high profile fraud cases arising from the economic bubble created during the Clinton administrations, we've got:
Bernard Ebbers, Worldcom, convicted - 25 years
Scott Sullivan, Worldcom, pleaded guilty - to be sentenced
Four executives, Worldcom, pleaded guilty - to be sentenced

Dennis Kozlowski, Tyco, convicted - to be sentenced
Mark Swartz, Tyco, convicted - to be sentenced

Martha Stewart, Martha Stewart Omni, convicted - served sentence, wearing ankle bracelet

John Rigas, Adelphia, convicted - 15 years
Timothy Rigas, Adelphia, convicted - 20 years
Michael Rigas, Adelphia, hung jury - to be retried

Richard Scrushy, HealthSouth, exonerated
Fifteen executives, HealthSouth, pleaded guilty - various sentences

Kenneth Lay, Enron, to be tried
Jeffrey Skilling, Enron, to be tried
Andrew Fastow, Enron, pleaded guilty - 10 years
Lea Fastow, Enron, pleaded guilty - served 1 year, released last Friday
Ben Glisan, Jr., Enron, pleaded guilty - 5 years
Scott Yeager, Enron, on trial, closing arguments today
Rex Shelby, Enron, on trial, closing arguments today
Kevin Howard, Enron, on trial, closing arguments today
Michael Krautz, Enron, on trial, closing arguments today
Joseph Hirko, Enron, on trial, closing arguments today

Joseph Quatronne, Credit Suisse First Boston, convicted - 18 months

James Olis, Dynegy, convicted - 24 years
Gene Foster, Dynegy, pleaded guilty - to be sentenced
Helen Sharkey, Dynegy, pleaded guilty - to be sentenced
And the huge sums paid out or to be paid by various individuals and companies to settle civil suits is mindboggling and there is no way I could find them all:
Andrews and Kurth law firm to Enron - $2.8 million
Enron to Dept. of Labor - $356.25 million
J.P. Morgan to Enron investors - $2.2 billion (with a "B")
Citigroup to Enron investors - $2 billion (another "B")
Merrill Lynch, Enron, to SEC - $80 million
CIBC, Enron, to SEC - $80 million
Various to Enron investors - $491.5 million
Five investment banks, Enron, to Alabama Pension Fund - $49 million
Enron to pensioners - $85 million

Dynegy to investors - $474 million

J.P.Morgan to Worldcom investors - $2 billion (with a "B")
Arthur Anderson, et al, Worldcom, to Alabama Pension Fund - $111 million
Arthur Anderson to Worldcom investors - $65.5 million
Bernie Ebbers to Worldcom investors - $5 million cash + $25-$40 million personal assets
Various to Worldcom investors - $6 billion (with a "B")

Merrill Lynch, various to tyco investors - $1.4 billion (with a "B")

AOL to SEC - $500 million
And the list goes on and on - endless. Companies, directors, executives, law firms, accounting firms, insurance companies, banks and investment houses paying fines and settlements to companies, investors, ex-employees, pensioners, local and state governments, the SEC, the department of Labor and to another almost endless list of plaintiffs tens and hundreds of millions and billions of dollars. All this in just the past 3 years. And the claims by various groups don't stop. There are individual lawsuits, class action lawsuits, local, state and federal regulatory agency lawsuits and lawsuits by insurance companies still pending or just being filed every day seeking to recover billions and billions of dollars lost through various frauds.

The fact that the overwhelming majority of these individuals and companies have been able to pay these huge settlements and fines and still remain viable operating entities shows that they were making excellent money without the frauds. So why risk the jail and the outrageously high payoffs in the first place? I dunno. Greed, I guess.

Also counting:
Liquid List, The Useless Tree, The Phoenix Principle, Ministry of Truth News, The Yin Blog, Amphetameme, Silicon Valley Sleuth, Ratcliffe Blog, Shawn Rogers, Power Blog, jayroe, B2Day, Generic Heretic, Full Disclosure, Hooda Thunk?, WHAT IN THE HELL ARE WE DOING HERE???????, Fables of the Reconstruction, The Political Teen, Binary Circumstance, Action Institute, blogofparag, Good Morning Silicon Valley, Liverputty, The Conservative Hipster, Dictum, Full Disclosure, Bugskull, Arranging Matches




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