BERNIE EBBERS, the former chief executive of WorldCom, faces the rest of his life in jail after being found guilty of orchestrating the biggest fraud in American corporate history.

The nine counts of securities fraud, including making false statements to the Securities and Exchange Commission (SEC) and conspiracy to commit securities fraud, were laid by government prosecutors who claimed Ebbers was the mastermind behind the massive deception that brought about WorldCom’s $11 billion bankruptcy in 2001.

The convictions carry a maximum sentence of 85 years and a maximum $2.25 million (£1.18 million) fine. Ebbers, 63, is not likely to be offered parole before serving at least 25 years.

Ebbers’s conviction is considered a major victory for US government prosecutors because he is the highest-profile executive to stand trial for fraud amid a series of corporate corruption scandals that hit America over the past five years, including the Enron and WorldCom collapses.

The jury of seven women and five men found Ebbers guilty on all counts in a Manhattan court. His wife, Kristie, accompanied by their daughter Carly, burst into tears and wept in an otherwise silent courtroom. Leaving the court on $10 million bail but due to return for a sentencing hearing on June 13, Ebbers made no comment to journalists.

Reid Weingarten, Ebbers’s lawyer throughout the six-week hearing, insisted that Ebbers was innocent and that an appeal would expose a series of flaws in the Government’s case. “The fight will continue,” he said. “I am confident Mr Ebbers will ultimately be vindicated . . . I never thought Mr Ebbers acted with criminal intent and I still don’t today.”

The Government’s case was based upon the testimony of Scott Sullivan, the former WorldCom chief financial officer, who pleaded guilty to fraud as part of a plea bargain. Mr Sullivan told the jury that Ebbers was an imposing and controlling boss who ordered him to falsify the accounts so that the struggling telecoms giant would meet profit targets expected by Wall Street.

The court also heard that Ebbers had debts of $400 million that were backed by WorldCom shares. His motive for committing the fraud, they said, was to prevent the WorldCom share price falling so his personal fortune would not be reduced.

He also told the jury that he rarely spoke to or had meetings with his finance chief, even though they had offices next door to one another.

Ebbers, a Canadian, started out his professional life as a nightclub bouncer and milkman and later became a high school gym teacher. He moved into the world of business as a warehouse worker.

Prosecutors described Ebbers’s actions as a “perfect storm of corruption”. They deflected his claims of ignorance by telling the jury that “he was WorldCom, and WorldCom was Ebbers; he built the company; he ran it; of course he directed this fraud”.

Last night the SEC accused Joseph Nacchio, the former chief executive of Qwest Communications, and six other former executives, of perpetrating a $3 billion fraud at the telecoms company.

In total judge Barbara Jones can impose a maximum custodial sentence of 85 years in jail. If Ebbers’s appeal fails, under federal sentencing guidelines he must go to jail. For the securities fraud Ebbers faces a maximum sentence ten years plus a fine of $1 million, or twice the gross gain or loss resulting from the offence, whichever is the greater.

For conspiracy to commit securities fraud he faces a maximum five years in jail plus a fine of $250,000, or twice the gross gain or loss resulting from the offence.Each of the seven counts of making false statements to the SEC carries a custodial sentence of 10 years.

THE FALLOUT

The guilty verdict against Bernard Ebbers is expected to open a floodgate of litigation against WorldCom’s former bankers, advisers and directors. JP Morgan Chase will be the first in court over its dealings with the telecoms company. Jury selection will begin tomorrow in a case brought by Alan Hevesi, the New York State Comptroller, against JP Morgan, Arthur Andersen and former WorldCom directors. Mr Hevesi is suing the bank and others over a $5 billion WorldCom bond issuance, of which JP Morgan was lead underwriter. Another 11 banks have settled the case.

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