Bernie Ebbers, convicted WorldCom CEO, dead at 78

Bernie Ebbers, convicted in one of the largest corporate frauds in history, died on Sunday. He was 78.

Ebbers spent 12 years in prison after presiding over an $11 billion accounting fraud at WorldCom, formerly headquartered in Clinton, Mississippi. Ebbers received a compassionate release in December on a 25-year sentence due to his failing health.

The former CEO of WorldCom was once hailed as a great American success story. Ebbers came from modest means and turned the company into one of the nation’s largest telephone companies, employing some 80,000 people at its peak.

The huge success turned out to be a huge accounting sleight of hand. In 2002, the company filed for bankruptcy. Thousands of WorldCom employees lost their jobs and their retirement savings, as Ebbers encouraged employees to vest heavily in the company through their 401ks. Other companies swallowed up by WorldCom, such as Jackson-based SkyTel, simply disappeared as what was left of WorldCom was sold off.

The phantom success also had a major impact on the phone industry as companies such as AT&T attempted to emulate and catch up to WorldCom and couldn’t. The late ’90s saw 40,000 AT&T employees laid off.

In 2005, a jury convicted Ebbers of securities fraud, conspiracy and filing false reports, charges he never admitted to and continued to blame on those who reported to him. The sentence of 25 years was one of the harshest ever given to a corporate leader.

On paper, he was worth $1 billion, but in the final accounting, Ebbers surrendered about $40 million to investors who had lost billions when the company filed bankruptcy.