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List of corporate executives charged with crimes

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Bernard Ebbers

Bernard John Ebbers, also known as Bernie Ebbers, is a Canadian-born businessman. He co-founded telecom company WorldCom and is a former CEO of that company.

In 2005 he was convicted of fraud and conspiracy in the largest (to date) accounting scandal in U.S. history, as a result of WorldCom's false financial reporting, and subsequent 11 billion dollar loss to investors.

On July 13, 2005, federal judge Barbara Jones, of the U.S. District Court, Southern District of New York in Manhattan, sentenced Ebbers to 25 years in a federal prison in Mississippi, the toughest sentence yet among other recent corporate accounting scandals. Ebbers, who is 63 years old, will begin his sentence in October, and is not expected to be released until he is 85.

Scott D. Sullivan

Scott D. Sullivan is an American Certified Public Accountant and the former CFO, Treasurer, and Secretary of WorldCom, who engineered WorldCom's $11-billion accounting fraud, the largest scandal of its kind in U.S. history.

Sullivan entered a guilty plea and was sentenced to five years in prison as part of a plea agreement in which Sullivan testified against former WorldCom CEO Bernard Ebbers, who received a 25-year sentence (the maximum sentence that Sullivan could have received if he had not accepted the plea agreement and was found guilty).

John Rigas and sons

John J. Rigas was one of the founders of Adelphia Communications Corporation which at its peak was one of the largest cable companies in the United States. He was also the majority owner of the Buffalo Sabres NHL Hockey Team.

He was forced to resign from his position as CEO in May 2002 after being indicted for bank, wire, and securities fraud. Timothy J. Rigas and Michael J. Rigas, his sons, as well as Peter Venetis, his son-in-law, and Michael Mulcahey were also charged with participation in these crimes. The executives are accused of looting the corporation by concealing $2.3 billion in liabilities from corporate investors and of using corporation funds as their personal funds.

Rigas was convicted of the charges in the summer of 2004 and on June 20, 2005 was sentenced to 15 years in federal prison. Adelphia Corporation was forced to file for bankruptcy after it had acknowledged that the three Rigases had taken $3.1 billion in loans that were not recorded on the books.

In 2005 John Rigas and his sons, Timothy Rigas and Michael Rigas, and Ellen Rigas, were charged with tax evasion and pled not guilty in October 2005.

Dennis Kozlowski

Leo Dennis Kozlowski , a former CEO of Tyco International, was convicted of misappropriating more than $400 million of the company's funds.

Kozlowski has been tried twice. The first attempt was a mistrial as one of the jurors who sided with Kozlowski, later claimed that she was threatened. Kozlowski testified on his own behalf during the second trial, stating that his pay package was "confusing" and "almost embarrassingly big", but that he never committed a crime as the company's top executive.

Kozlowski was convicted on June 17, 2005 for misappropriation of Tyco's corporate funds, among other charges. The prosecution won a total of 22 counts of grand larceny for $150 million in unauthorized bonuses. He was convicted of fraud against the company shareholders for an amount of more than $400 million.

On September 19, 2005 he was sentenced by Judge Michael Obus in the Manhattan Supreme Court to prison for a minimum of eight years and four months and a maximum of twenty five years in prison for his role in the scandal.

Mark Swartz

Mark Swartz, former CFO of Tyco International found guilty of looting the industrial products and services company of hundreds of millions of dollars to fund an extravagant lifestyle.

In 2005 a state court jury deliberated over 11 days before returning the verdict in the second prosecution of Swartz on charges of grand larceny, securities fraud, and falsifying business records. The verdict came after a four-month trial in Manhattan state Supreme Court. Swartz was sentenced to eight-and-a-third to 25 years and order to pay $72 million in fines and restitution.

Joseph Nacchio

Joseph Nacchio, chairman of the board and chief executive officer of Qwest Communications International from 1997 to 2002.

Nacchio resigned in June 2002 amidst insider trading rumors. On March 15, 2005, Nacchio and six other former Qwest executives were sued by the U.S. Securities and Exchange Commission. They were accused of a "massive" $3 billion financial fraud between 1999 and 2002 and of benefiting from an inflated stock price.

Nacchio was indicted on December 20, 2005 on insider trading charges in Denver, Colorado. He was forced to surrender his passport for fear that he would flee the country. The indictment against Nacchio charges him with 42 counts of insider trading. Each count carries a potential 10-year jail term and corresponds to a sale of Qwest shares, including a flurry in April-May 2001, when Nacchio sold almost $39 million in stock. At the time, Qwest was trading between $41.12 and $38.31.

Andrew Fastow

Andrew S. Fastow was the chief financial officer of Enron Corporation until the U.S. Securities and Exchange Commission opened an investigation into his conduct in 2001.

On October 31, 2002, Fastow was indicted by a federal grand jury in Houston, Texas on 78 counts including fraud, money laundering, and conspiracy. On January 14, 2004, he pled guilty to two counts of wire and securities fraud, and agreed to serve a ten-year prison sentence. He also agreed to cooperate with federal authorities in the prosecutions of other former Enron executives.

On May 6, 2004, his wife Lea Fastow, a former Enron assistant treasurer, pled guilty to a misdemeanor tax charge and was sentenced to one year in a federal prison in Houston, Texas, and an additional year of supervised release. Lea was released to a halfway house on July 11, 2005.

Ken Lay

Ken Lay was the chief executive officer and chairman of Enron Corporation (with a brief intermission) until his resignation on January 23, 2002 after Enron went bankrupt in December 2001.

Lay was indicted by a grand jury in Houston, Texas on July 7, 2004 with counts of securities fraud, wire fraud and making false and misleading statements. On May 25, 2006 he was convicted on all counts. However, Lay died on July 5, 2006 in Aspen, Colorado of a massive heart attack. As a result of Lay's death prior to exhausting his appeals, his conviction is abated, and Lay is legally considered never to have been indicted or convicted of criminal charges. Civil suits are expected to continue against Lay's estate. However, claimants may not seek punitive damages against a deceased defendant, only compensatory damages. He would have been sentenced on September 11, 2006.

Jeffrey Skilling

Jeffrey Skilling is the former CEO of Enron Corporation, and was convicted of federal felony charges relating to Enron's financial collapse. After a 56-day trial ending with a jury verdict on May 25, 2006, Skilling was found guilty of 19 out of 28 counts against him, including one count of conspiracy, one count of insider trading (although he was acquitted of the other nine counts of this particular charge), five counts of making false statements to auditors, and twelve counts of securities fraud. Each conviction carries a maximum sentence of 5 to 10 years. Court observers estimate Skilling faces at least 25 years in prison for having used off-the-books partnerships to manipulate Enron's finances, as well as additional jail time for using inside information to sell Enron stock.

Richard M. Scrushy

Richard Marin Scrushy is the founder and former CEO of the physical rehabilitation healthcare giant HealthSouth, based in Birmingham, Alabama.

On March 18, 2003, the FBI raided HealthSouth headquarters and the U.S. Department of Justice leveled charges of inflated earnings reports amounting to over $2 billion from the mid 1990s. Many of the charged executives pled guilty to fraud and agreed to testify against Scrushy. He was indicted in November of that year, charged with 85 counts of fraud, money laundering, conspiracy, and making false statements. In 2005, after 21 days of deliberation, Scrushy was acquitted on all 36 counts of fraud and conspiracy stemming from the $2.7-billion fraud.

On October 26, 2005, just four months after being acquitted, Scrushy was indicted on new charges of bribery and mail fraud in connection with former Alabama Governor Don Siegelman. Two former Siegelman aides were charged in the indictment as well. On June 29, 2006, a Federal jury found both Scrushy and Siegleman guilty on multiple charges, including bribery, mail fraud, and obstruction of justice. Sentencing is pending as of this writing.

Naveen Jain

Naveen Jain was the founder and CEO of Dot-Com darling Infospace. During its peak, Infospace was valued at over $35 billion even though it was profitless. While the stock hovered at a lofty valuation Jain sold more than $500 million worth of InfoSpace shares.

Revenue shortfalls and accounting irregularities required InfoSpace to report a $1 billion loss, devastating its stock. Jain used complex accounting procedures with a view to meeting wall street analysts’ revenue estimates in the aftermath of the Dot-Com Boom, according to a news report.[link] He was removed from his position as Chairman and CEO in December of 2002, by which time the company's stock had fallen more than 99% from its peak. Jain was ordered to repay $247-million (U.S.) for violating securities laws on insider trading.

Walter Forbes

Walter Forbes was the former CEO of Cendant Corporation. In 1998, Cendant Corporation was accused of fraud after their company's merging of CUC International and HFS Incorporated in 1997. At the time, Vice Chairman E. Kirk Shelton, had arbitrarily inflated the company's revenue by $500 million over a period of three years. When this report was released to the public, the resulting damage to the company due to market value was reportedly $14 billion, with stock trading from a high of $41 down to nearly $12. At the time, this fiasco was the largest case of accounting fraud in the country. The trial of Forbes ended in a mistrial.

Frank Quattrone

Frank Quattrone is a former securities banker at Credit Suisse First Boston who has been serving time in prison for obstruction of justice and witness tampering. During his peak at Credit Suisse he was earning roughly $120 million a year.

After one mistrial, he went to trial for the second time and was convicted on charges of obstruction of justice relating to Credit Suisse First Boston's handling of IPO's. He was sentenced to 18 months, which was two months over the Federal guidelines.

On March 20, 2006, this conviction was overturned and a new trial ordered by the U.S. Court of Appeals for the 2nd Circuit, on grounds of erroneous jury instructions. [link]

Martin Grass

Martin Grass, the former CEO of Rite Aid Corp. was sentenced in 2004 to eight years in prison for his role in a massive accounting fraud at the drugstore chain his father co-founded. His sentence also included a $500,000 fine and three years' probation. Five other executives were also found guilty.

Jamie Ollis

Jamie Ollis, the former vice president of finance and attorney for Dynegy Inc., was sentenced to 24 years in prison without the chance of parole for his role in an accounting scheme. His sentence was overturned by the Fifth Circuit court of appeals, and is now awaiting re-sentencing by district court judge Sim Lake.

Heinrich Florian, Günter Hefner, Peter Schaefer, and T. Rudd Corwin

Four Infineon executives were the first to plead guilty to charges of DRAM price fixing in violation of the Sherman Antitrust Act. The four executives were sentenced to 4 to 6 months in jail and paid $250,000 in fines. They also agreed to aid the US Department of Justice with the ongoing investigation of the international cartel of several other chip makers including Samsung and Hynix Semiconductor. The DOJ probe into the actions of the companies began in 2002 at the urging of computer makers, including Dell Inc. To date, both Samsung and Hynix have plead guilty to their role in the conspiracy and have been slapped with $300 million and $185 million fines respectively. Additional indictments are speculated to individuals from both companies involved in the scandal as well as pending civil suits by computer makers.

Others

 

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