US

Former WorldCom chief Bernard Ebbers released from prison

Disgraced executive’s mental and physical condition has ‘significantly worsened’

Bernard Ebbers in 2002 but he has now lost considerable weight in prison and suffer from myriad health problems. File photograph: AP

Thu Dec 19 2019 - 00:00

Former WorldCom chief executive Bernard Ebbers was ordered freed from prison, almost eight years before he was due to be released.

A federal judge in Manhattan on Wednesday granted compassionate release to Ebbers, who has served more than 13 years of a 25-year sentence for orchestrating an $11 billion accounting fraud that bankrupted the company. US district judge Valerie E Caproni said Ebbers’s health is failing and that letting him out early doesn’t minimize the impact of his punishment.

Relatives of the 78-year-old reacted with jubilation in court.

“We’re elated and just very grateful not only for Mr Ebbers but especially for his family,” said their lawyer Graham Carner after the hearing. “All they wanted was for him to live out his time with them.”

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Ebbers was sentenced in 2005 for overseeing the fraud, which hid costs and shifted reserves to boost the company’s profits. He was scheduled to be released in July 2028 with credit for good behaviour. It is not immediately clear when he will leave prison.

After the accounting discrepancies came to light, WorldCom shares collapses, losing investors more than $180 billion before the company filed for what was then the largest bankruptcy in US history in July 2002. WorldCom later emerged from bankruptcy as MCI and was acquired by New York-based Verizon Communications.

Attorneys for Ebbers’s family asked Caproni in September to free him due to a host of health problems, including macular degeneration that has left him legally blind and a heart condition that makes him vulnerable to cardiac arrest. The US Bureau of Prisons had denied a request from Ebbers’s daughters under the 2018 First Step Act, which allows some federal inmates to be released if they are over 60 years old and face terminal illnesses.

While Judge Caproni noted that records “suggest some exaggeration of his mental condition” that led her to believe Ebbers was trying to manipulate her, she also expressed concern that he’s malnourished, appears to have lost almost 60lbs since last year and has a persistent bedsore.

“There’s no excuse for that,” she said.

Worsening Health

Mr Carner had urged the judge to free Ebbers, pointing out that his mental and physical condition has “significantly worsened” in the past 3½ months, with his weight dropping from more than 200lbs last year to 147lbs earlier this month. He is also incontinent and anaemic and, in the past month, has suffered four falls and been hospitalised three times, said Mr Carner.

Ebbers’s request was supported by Barbara Jones, the former judge who sentenced him in 2005.

Prosecutors argued that Ebbers should remain in prison, saying that medical officials can manage his conditions and provide him with 24-hour care. Assistant US attorney Jason Cowley told Judge Caproni that allowing Ebbers to go free early “would send a terrible message to the rule of law”.

“The scope and seriousness of Mr Ebbers’s crimes cannot be understated,” he Cowley.

Judge Caproni said that she had received numerous letters from shareholders who lost money in the WorldCom collapse. She noted some thought Ebbers should die in jail while others expressed support for releasing the former milkman who built a small Mississippi telephone company into the second-largest US long-distance provider before it fell apart.

The judge noted that Ebbers had already served more than a decade in prison and that Congress clearly intended for some prisoners to be released by passing the First Step Act.

“It seems clear that Congress was frustrated by the fact that the Bureau of Prisons was not doing compassionate release,” said the judge. “Clearly, Congress was sending the message that they do think people should be released.” – Bloomberg

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