Between the years 1998 and 2000, Worldcom defrauded hundred of people in the worldcom fraud scam.
This scam included many people like the company CEO who made money on the stocks that fell and then took out a loan to pay this off which was never paid back.
There were various personal items that were bought with the company's money such as a ranch in Canada , timberlands in Georgia and a shipyard in Mississippi .
The other man that was involved in the worldcom fraud was the CFO, secretary and treasurer.
He told the company employees to lie on the auditing and accounting documents. He also lied in various public statements about the finances of the company and he made over 14 million dollars from the stock sales.
The actual occurrence of the worldcom fraud took place over the two years when they reduced the reserve accounts that were supposed to be held for liabilities. They made over 2 billion dollars from these reserves and when the reserves didn't make it, a false email was sent to a Texas division about the finances.
The other part of the fraud occurred when key staff members were told to put down the operating costs as long term investments and this resulted in over 3 billion dollars.
This company became the leader in internet and long distance communication by lying on their income and expenditure forms.
They were found out by mysterious tips sent to the internal auditing department and closer examination posed the question of why they were making so much money, when AT&T was losing money. They were investigated and eventually after a lawsuit filed for bankruptcy in 2002.
Back to Our Scandal Archives