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Fraud Verdict Is Ominous for Toppled CEOs

THE NATION

Ex-WorldCom chief Ebbers is convicted of a huge accounting scam, though he professed ignorance. Such a claim may not help others.

March 16, 2005|Walter Hamilton, Lisa Girion and Thomas S. Mulligan | Times Staff Writers

The company's former investment banking star, Frank Quattrone, was sentenced to 18 months in prison for obstruction of justice. On Jan. 27 he asked an appeals court to throw out his conviction.

Enron

A January trial is set for former Enron chairman and CEO Kenneth L. Lay, former CEO Jeffrey K. Skilling and former Chief Accounting Officer Richard A. Causey.

All have pleaded not guilty to fraud and conspiracy. Chief Financial Officer Andrew S. Fastow pleaded guilty in 2004 to two counts of conspiracy. Fastow's wife, Lea, pleaded guilty in May and began serving a one-year sentence in July.

HealthSouth

Fired CEO Richard Scrushy is on trial in Birmingham, Ala. He is accused of masterminding a $2.7-billion plot to inflate assets, increase profit and to meet Wall Street expectations and bolster the price of HealthSouth's stock. Scrushy pleaded not guilty in 2003.

Martha Stewart

Living Omnimedia

Company founder Martha Stewart is serving five months under house arrest at her home in Bedford, N.Y. after serving five months in a federal prison camp. In March 2004, jurors convicted Stewart of conspiracy, obstruction of justice and making false statements related to a personal sale of ImClone Systems Inc. stock.

Qwest Communications

In April, jurors acquitted former executives John Walker and Bryan Treadway of all charges, cleared Grant Graham of some charges and deadlocked against Thomas Hall. All were accused of improperly booking revenue. Graham pleaded guilty in May to being an accessory to wire fraud. Hall pleaded guilty in September to falsifying documents.

Tyco International

L. Dennis Kozlowski and Mark Swartz are being tried a second time on charges of grand larceny and securities fraud after a mistrial in April. Former top Tyco attorney Mark Belnick was acquitted of the same charges.

Sources: Associated Press, Times research

Los Angeles Times

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