WEIGHING THE SENTENCE Judge Barbara Jones received many letters before the sentencing of Bernard Ebbers. Read letters requesting leniency1 and others urging a tough sentence2, with some names and addresses redacted. • Vote: Did Ebbers receive a fair sentence?3   WALL STREET JOURNAL VIDEO 4 Bernard Ebbers's attorney Reid Weingarten5 says he will appeal the decision "as vigorously as possible." MORE ON THE CASE • Ebbers Bio: Humble beginnings6   • Billions to Bankrupt: WorldCom's Fall7   • Courtroom Accounting: A testimony scorecard8   • How They Fared: Other high-profile defendants9   • Complete Coverage: Executives on Trial10   FURTHER READING • Judges Keep Sentence Formula Despite Ruling11 2/11/05   • High Court Declares Guidelines Violate Rights12 1/13/05   • Page One: Disarray Plagues Federal Sentencing13 12/28/04

Mr. Ebbers, dressed in a dark suit and light blue tie, didn't speak to reporters after his sentencing. When asked by Judge Jones if he had anything to say, he indicated, in barely audible tones, that he didn't.

The sentence for Mr. Ebbers's conviction in the $11 billion fraud at WorldCom is the harshest yet given to an executive convicted in the recent wave of high-profile corporate scandals. That made it a key win for federal prosecutors in their push to crack down on corporate crime.

Yet the government also suffered a setback yesterday when prosecutors decided not to retry another former CEO, HealthSouth Corp. founder Richard M. Scrushy, on perjury charges that were dismissed before he was acquitted earlier this month on 36 other criminal counts. (See related article¹⁴.)

In punishing Mr. Ebbers, Judge Jones said she believed federal guidelines called for a sentence of 30 years to life. But she cited Mr. Ebbers's charitable work in handing him 25 years.

Outside the courtroom, Reid Weingarten of Steptoe & Johnson LLP, the lead defense attorney for Mr. Ebbers said, "I think an innocent man got sentenced today. Bernie Ebbers was transformed into a symbol, a distorted picture of corporate corruption."

Mr. Ebbers continues to maintain that the fraud was committed by underlings without his knowledge. He is planning to appeal, Mr. Weingarten said. Judge Jones will decide later whether Mr. Ebbers can remain free while an appeal is being considered; attorneys not affiliated with the case estimated such an effort could take up to a year.

Legal observers underscored the severity of the penalty for a corporate crime. "It's a very drastic sentence," said George B. Newhouse Jr., an ex-federal prosecutor who heads the white-collar defense practice at law firm Thelen Reid & Priest LLP in Los Angeles.

Mr. Newhouse attributed the sentence to public outcry against corporate criminals, noting that it followed similarly tough penalties given to John Rigas, the 80-year-old founder of Adelphia Communications Corp., and his son Timothy Rigas, in the fraud at that company. They received sentences of 15 years and 20 years, respectively.

Bernard Ebbers and his wife, Kristie, wept in court after the sentence was handed down.

"These sentences," he said, "are commensurate with what you'd expect to see for people who commit egregious violent crimes, who take life."

Said Ellen Podgor, a law professor at Georgia State University College of Law: "We have never in our history seen sentences like this in white-collar cases. ...If these individuals had been sentenced 30 years ago, I wonder if they would have gotten jail time."

Also yesterday, the Securities and Exchange Commission filed a civil fraud action against Mr. Ebbers for his role in the WorldCom fraud. Mr. Ebbers agreed to settle the matter by consenting, without admitting or denying anything, according to the SEC. He will be permanently barred from serving as an officer of a public company. The settlement is pending court approval, and the SEC said its investigation is ongoing.

More than 2.5 million investors are estimated to have lost money in the WorldCom fraud. How many millions -- or billons -- of dollars were lost has been a subject of intense debate, since the telecommunications industry as a whole was in meltdown well before WorldCom's fraud was disclosed. Investors who bought shares early in the fraud may have lost less as a direct result of the fraud than those who invested later, when more investment decisions likely were based on false information.

In all, WorldCom's fraud and bankruptcy wiped out a stock that was worth more than $180 billion at its peak in 1999 -- though it had lost considerable value before the company's 2002 collapse.

Earlier this month, Mr. Ebbers agreed to pay $5 million in cash and transfer nearly all his assets to a liquidation trust to settle a class-action suit filed by shareholders of WorldCom. The company, now a significantly smaller entity known as MCI Inc., recently agreed to be bought by Verizon Communications Inc.

The assets to be transferred, whose total value is estimated to be between $25 million and $40 million, include Mr. Ebbers's multimillion-dollar home in Brookhaven, Miss., a tax refund and numerous investments. He will be left with "certain amounts" to pay for legal bills, a modest living allowance and small house for his wife.

The sentencing punctuated the fall of a man who rose from being a Mississippi basketball coach and motel owner to heading what was considered to be a rising giant of the telecom industry during its peak in the late 1990s.

From a tiny Mississippi reseller of phone calls, WorldCom grew through a series of acquisitions to become the nation's second-largest long-distance company and a stock-market star of the boom market of the 1990s. Mr. Ebbers was celebrated on Wall Street as a brash but folksy CEO -- especially after he pulled off what was then the biggest corporate takeover in U.S. history, the $37 billion purchase of MCI in 1997.

But by late 2000, a fraud was brewing beneath the surface, as WorldCom executives falsely boosted profits by marking operating expenses as capital spending, an improper practice. Underlings, including former Chief Financial Officer Scott Sullivan, testified Mr. Ebbers masterminded the fraud, ordering employees to "hit the numbers" and meet Wall Street expectations.

In 2002, Mr. Ebbers was forced out amid controversy over more than $400 million he owed the company, which had assumed bank loans he had taken out. Two months later, the company announced it would restate financial results and lay off about 17,000 employees -- the first public inkling of fraud. Soon it was in bankruptcy protection and under investigation by prosecutors and regulators.

By then, a crash was well under way for technology and telecom companies, as the industries struggled with heavy debt and overcapacity. Scores of small upstarts had failed, and even WorldCom had begun to sputter. The company had been among the big proponents of the view that Internet traffic was growing so rapidly that virtually no amount of spending and network-building was too much.

For nearly two years after the company's problems began, prosecutors were unable to charge Mr. Ebbers, in good part because the executive hadn't used email and left virtually no paper trail. Then, on the eve of Mr. Sullivan's trial in March 2004, the former chief financial officer agreed to plead guilty to three counts of securities fraud and testify against his former boss.

That enabled prosecutors to charge Mr. Ebbers that same month. Lead prosecutor David Anders built a case that relied heavily on the testimony of Mr. Sullivan.

During the trial that began in January, defense attorneys worked to tarnish Mr. Sullivan as he described what he said was Mr. Ebbers's role in leading the fraud. Ultimately, they decided to put Mr. Ebbers on the stand to respond himself, a possible tactical mistake. Jurors interviewed after the verdict in March said they couldn't reconcile Mr. Ebbers's insistence that he was unaware of the fraud with his image as a hands-on CEO.

Before the sentence was handed down yesterday, Mr. Weingarten asked Judge Jones to consider Mr. Sullivan's role as the "mastermind" of the fraud and his eleventh-hour guilty plea. He said while he didn't want to "do anything that cranks up" Mr. Sullivan's sentence, the judge should make them comparable. Mr. Sullivan is to be sentenced on Aug. 4.

In asking for leniency, Mr. Weingarten invoked Mr. Ebbers's heart condition. During the trial, Mr. Ebbers said he suffers from cardiomyopathy, a serious condition in which the heart muscle doesn't pump blood properly.

Mr. Weingarten also cited his client's charity work, referring to 169 letters submitted to the court on Mr. Ebbers's behalf by friends, family and former colleagues. "I just don't think you can fairly read the 169 letters we submitted and conclude it is anything but extraordinary," he said.

Mr. Weingarten said most of Mr. Ebbers's more than $100 million in charitable giving was anonymous. "He wanted no self-aggrandizement," he said. "There are no plaques on the wall that say, 'This gym for disabled kids was built by Bernie Ebbers.' "

He described how Mr. Ebbers helped one child get into school when his family had financial hardship. "An angel appeared," Mr. Weingarten said. "He didn't know who he was. And the angel was Bernard Ebbers.

"If you live 60-some-odd years and you have an unblemished record, doesn't that count, particularly on this day?" he asked.

Judge Jones said she was impressed by the letters. But, she said, "Mr. Ebbers created the fraud that caused a number of investors to suffer losses....This fraudulent scheme defrauded the market as a whole as well. It seems quite clear to me that Mr. Ebbers was a leader in criminal activity in this case." She said Mr. Ebbers could receive treatment for his heart condition in prison.

As yesterday's hearing ended, Mr. Ebbers remained still while bailiffs cleared the courtroom. He stood, slightly hunched, at the defense table, turning away as best he could from the crowd in the courtroom.

A few minutes later, after the courtroom had been cleared, Mr. Ebbers, his wife and members of the defense team walked quietly out a side door and headed down the stairs to the street. Bailiffs prevented people from following or approaching.

Mr. and Mrs. Ebbers appeared subdued as they covered the few steps from the door to the stairwell.

Write to Dionne Searcey at dionne.searcey@wsj.com¹⁶, Shawn Young at shawn.young@wsj.com¹⁷ and Kara Scannell at kara.scannell@wsj.com¹⁸