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June 28, 2002 — (WEB HOST INDUSTRY REVIEW) — Investigations into the WorldCom scandal have reportedly found no support for decisions to shift billions of dollars in expenses on the company?s books, increasing the chance that the transactions involved criminal fraud, said a Friday report by the New York Times.
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Instead, investigators are said to have found that the sums shifted exactly matched those needed by WorldCom in order for the company to meet its profit margin goals.
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In interviews with investigators, former chief financial officer Scott D. Sullivan is reported to have said he independently decided to make the expense shifts without consulting with the company?s accountants at the time of the moves, Arthur Andersen.
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The United States attorney in Manhattan is already said to have served WorldCom with subpoenas seeking almost every record that went into the preparation of financial statements dating several years back.
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The lack of records could prove to be critical in the development of the investigations into WorldCom, which have picked up steam since the initial announcement by the company that it had incorrectly accounted for nearly $4 billion in expenses.
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The House Financial Services Committee said that it would subpoena current and former WorldCom executives and a Wall Street analyst for a July 8 hearing on how the misstatement of expenses took place. WorldCom CEO John W. Sidgmore, former CEO Bernard J. Ebbers and dismissed CFO Scott Sullivan will receive the subpoenas.
