Worldcom

In The Region Medifast Inc. reports earnings declines for year and 4th quarter Medifast Inc., the Owings Mills maker of diet soy meals, reported decreases yesterday in earnings for the fourth quarter and last year. Fourth-quarter earnings dropped to $35,000 -- less than 1 cent per share -- from $416,000, or 4 cents a share, a year earlier. Medifast said the decrease was because of a change in tax structure. For the year, earnings fell to $1.7 million, or 14 cents a share, from $2.4 million, or 22 cents a share, in 2003.

NEW YORK - A federal jury ended its second day deliberating accounting-fraud charges against former WorldCom Inc. Chief Executive Officer Bernard J. Ebbers without reaching a verdict yesterday. Ebbers is accused of leading an $11 billion fraud that drove the company into the largest bankruptcy in U.S. history. The jury spent seven hours deliberating yesterday. During the day, the jury sent notes to U.S. District Judge Barbara Jones requesting transcripts of trial testimony and exhibits, including a handwritten letter to Ebbers from former WorldCom finance chief Scott Sullivan.

NEW YORK - In a broad and blistering attack, federal prosecutors accused Bernard J. Ebbers, the former chief executive of WorldCom Inc., of being caught in a "perfect storm of corruption" that led him to order deputies to commit a multibillion-dollar fraud. "We all know money can corrupt people, power can corrupt people and pressure can corrupt people," said William F. Johnson, an assistant U.S. attorney, in the prosecution's closing arguments in the case against Ebbers in U.S. District Court in Manhattan yesterday.

NEW YORK - Former World Com Inc. Chief Executive Officer Bernard J. Ebbers denied yesterday that he was told by his finance chief that the company had to issue an earnings alert, then admitted asking a lawyer about the subject days later. In the second day of cross-examination at his fraud trial in New York, Ebbers said Scott D. Sullivan, then chief financial officer, never informed him in September 2000 that WorldCom should tell investors that earnings wouldn't meet projections. Sullivan, the government's star witness, testified last week that he told Ebbers of the need to alert investors to the shortfall.

Bernard J. Ebbers, the former WorldCom chief executive once hailed as one of the most brilliant telecommunications entrepreneurs ever, told a packed courtroom yesterday, "I don't know about technology and I don't know about finance and accounting." In taking the stand in his own defense, Ebbers displayed a folksy innocence that was part of the defense's effort to cast him as someone who relied on others with greater expertise to handle the details of running WorldCom as it grew from a small regional reseller of phone services to one of the largest companies in American industry.

NEW YORK - Former WorldCom Inc. finance chief Scott D. Sullivan told jurors yesterday that he lied to company officers, directors and accountants about fraudulent practices in his department even after chief executive Bernard J. Ebbers resigned. Defense lawyer Reid Weingarten went on the offensive in his cross-examination of Sullivan, attacking the credibility of the government's star witness at Ebbers' criminal trial. Sullivan testified earlier about phony accounting maneuvers that drove the company into bankruptcy, claiming they were done under pressure from Ebbers to prop up WorldCom stock.

From audacious startup to industry innovator to an insatiable acquirer that came to symbolize the corporate greed that brought down other high-fliers, MCI's story had it all. In 1968, William G. McGowan saw the potential to make history with the fledgling MCI, which had begun five years earlier as an 11-employee company that went on to build a row of microwave towers to connect truckers with dispatchers. McGowan set the seemingly impossible goal of breaking the stranglehold that American Telephone and Telegraph Co. held on telephone lines in the United States.

NEW YORK - Former WorldCom Inc. chief executive Bernard J. Ebbers told a television interviewer that dividends for the company's MCI Group weren't at risk even though his finance chief had told him that there wasn't enough cash to pay them, jurors at his fraud trial were told yesterday. Prosecutors in Manhattan federal court showed the jury a video recording of Ebbers saying in a February 2002 interview on the CNBC cable news channel that the dividend would not be imperiled by WorldCom's slowing growth for 2002.

NEW YORK - WorldCom Inc. abandoned merger talks with Verizon Communications Inc. in 2001 because finance chief Scott D. Sullivan and chief executive Bernard J. Ebbers feared they'd have to disclose that they had cooked the company's books, Sullivan said yesterday. "The real reason we were stopping discussions was because of the non-public information we'd have to exchange with Verizon," Sullivan testified in his fourth day on the witness stand at Ebbers' fraud trial in New York. That information might show "the adjustments we made" in the "line-cost and revenue areas."

NEW YORK - WorldCom's former chief executive asked his chief financial officer how he hid millions of dollars in monthly expense from Wall Street analysts, the one-time finance chief told jurors yesterday. Scott D. Sullivan said he informed Bernard J. Ebbers in April 2001 that WorldCom would have to mask $771 million in fees it paid to other telephone carriers for the use of their lines to meet analyst expectations for the first quarter. "I told Bernie we had made an adjustment to line-cost expenses," Sullivan testified at the criminal fraud trial of his former boss.