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Corporate fraud inquiries widen
Compiled from Times wires On a day when the White House said the Justice Department had started hundreds of corporate fraud investigations, a former WorldCom official pleaded guilty and newspaper reports mounted about impending action in other scandals. FRAUD INQUIRIES: The Justice Department has opened more than 400 investigations into corporate fraud since President Bush took office, the White House said in a statement Thursday. More than 500 people have been charged and convictions have been obtained or plea arrangements are pending in more than 200 cases, White House officials said. "We are going to bring all those involved in corporate wrongdoing to justice, and we're going to do so as quickly as we possibly can," Deputy Attorney General Larry Thompson said in an interview. "We're using very aggressive investigative techniques." WORLDCOM GUILTY PLEA: WorldCom Inc.'s former controller pleaded guilty Thursday to charges that he manipulated accounting to inflate profits and then tried to cover it up, moving federal prosecutors a step closer in their pursuit of senior company executives. David Myers, the first WorldCom executive to fall in the largest accounting scandal in U.S. history, told U.S. District Court Judge Richard Casey that he was directed by his superiors to falsify accounting records. His guilty plea came as part of a deal to help the government target even more senior executives in exchange for leniency. Myers, 45, showed little emotion as he pleaded guilty to three counts of conspiracy, securities fraud and making false statements to the Securities and Exchange Commission. In a related move, the SEC filed its own civil complaint against Myers on Thursday. The 25-page complaint closely mirrors the case outlined by prosecutors. Myers faces a multimillion-dollar fine and up to 20 years in prison, but he will likely get significantly less time because of his cooperation. MARTHA STEWART CASE: The Wall Street Journal reported in Thursday's editions that an assistant at Merrill Lynch & Co. has agreed to plead guilty to a misdemeanor and testify against Martha Stewart and others in the federal investigation of stock sales in ImClone Systems last year. The Wall Street Journal, citing unnamed sources who it said were familiar with the discussions, reported that prosecutors had sought to charge the assistant, Douglas Faneuil, with a felony for making false statements to investigators, but later agreed to a misdemeanor in exchange for his cooperation. The charge is expected to be filed within days, the newspaper said. ENRON INQUIRY: Prosecutors are expected to announce an indictment of Enron's former chief financial officer, Andrew Fastow, as soon as next week, USA Today reported in Wednesday's editions, citing unnamed legal sources close to the investigation. A criminal indictment would be the first against one of the former top executives of Enron, a global energy giant whose collapse last year cost shareholders billions, left thousands of workers unemployed and turned a spotlight on corporate ethics. The indictment is expected to charge Fastow and several of his subordinates with fraud and other crimes related to the vast web of partnerships Enron used to move debt from its books and inflate profits fraudulently, the newspaper said. Investigators say Fastow made at least $30-million on the partnerships during his tenure as CFO from 1999 until October. -- Information from the Associated Press, Washington Post and Bloomberg News was used in this report.
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From the Times Business report
From the AP
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